Xpress-MP Suite Leading Optimization Software Linear Programming Mixed Integer Programming

   The System Evolution and Incentives Work Package evaluates the effect of current policies, and also considers the mix of policies and instruments required to achieve both the targets set by the Government and the Scenarios developed by the Foresight Work Package.

  Innovations, Investment and Incentives

Research at the Department of Applied Economics involves the expansion of numerical models to determine the evolution of the generation mix and associated transmission issues. In particular, we will work in partnership with ICF Consulting on their Integrated Power Model.
This model will be developed to incorporate intermittent generation and to handle the target scenarios identified by the Foresight Work Package.

In addition to the IPM model, we have also developed a simplified model for more illustrative purposes. The Electricity 2010 Calculator allows basic scenarios to be simulated, mapping the corresponding implications for electricity generation in 2010, including the role of Renewables and carbon prices. The file can be freely downloaded for the user to run various scenarios. Download the file here.

The second strand of work undertaken at the DAE evaluates the effects of various economic instruments. We evaluate the effect that these instruments have on the rate of adoption of new technologies. Research will also be conducted on the price and subsidy implications of different targets for renewables and emissions.

In addition to considering the design of policies, we also consider the problem of sequencing reforms, given the existing set of policies (Climate Change Levy, ROCs, UK ETS). The aim is to identify the combination of instruments and the reforms required to achieve the target scenarios at least cost, whilst taking into account issues of policy stability, credibility and compatibility with EU obligations.

As part of this Work Package, Graham Sinden of the Oxford Environmental Change Institute will be working on the systems effects of intermittent sources. Hourly data will be analysed to reveal the implications of diversification upon intermittency, leading to a better representation of system reliability, costs and emissions.

 Computational General Equilibrium Model

The University of Hull draws upon the modelling work conducted within the DAE to develop a CGE model, with particular attention given to the electricity sector.

The CGE model will be used to evaluate long-term interactions of the energy sector with the rest of the economy. This will facilitate an assessment of the effectiveness of the policies identified elsewhere in the work package, and demonstrate their impact on the demand for and cost of electricity. A potential development of the model will look at the distributional impact of these same policies.

 Social & Psychological Issues Affecting System Evolution

The Institute of Environment and Sustainable Development at De Montfort University assesses how social and psychological perceptions of infrastructure change will affect system evolution. The research assesses how existing policies and practices regarding fuel poverty and social exclusion may act as a constraint to changes in the network. Work will also be undertaken to examine how the social acceptability will constrain system evolution - here the focus will be on public attitudes to change and the manner in which this change is introduced.

Project Leader at De Montfort University: Patrick Devine-Wright
Further details of the research at De Montfort Univeristy