Integrated Energy Modeling at Niti Aayog: Where From, Where to?

Integrated energy policy is of vital importance to India’s future. The need for such an integrated energy policy was first highlighted by the erstwhile Planning Commission in 2006 in its expert committee report on integrated energy policy. Without such an integrated outlook, matching India’s exploding energy demand with its limited energy supply options will be a tightrope walk. Different fuels are substitutable to each other in production and consumption making it possible to exploit alternative technologies to satisfy energy demand more optimally. An exercise that is extremely handy in exploring this area is integrated energy modeling which creates scenarios to display alternative futures with different technologies and fuel supply options.

Over the years Niti Aayog’s Energy division has made sustained efforts towards building integrated energy tools for a holistic understanding of the energy sector. In 2014, it unveiled India’s first interactive data tool IESS (India Energy Security Scenarios 2047). This was Version 2.0 of the same tool launched during the Planning Commission era in 2012. Niti Aayog also started a joint working group for integrated energy modeling called SGWG (Sustained Growth Working Group) in collaboration with its knowledge partners. The research of this working group focuses on two themes: ‘Energy-Water-Food Nexus’ and ‘De-carbonisation of the Transport Sector.’ As a part of this exercise, the knowledge partners use different energy models to answer common questions related to a sustainable energy future. GCAM (Global Change Assessment Model), MARKAL (MARKet Allocation), IMRT are some of the models used in this joint exercise.

In its latest effort to do more sophisticated energy modeling, Niti Aayog organized a workshop on energy modeling using MESSAGE model. The workshop was conducted by IIASA (International Institute for Applied Systems Analysis), the founding organization of MESSAGE. This model has been used in developing long-term scenarios by Intergovernmental Panel on Climate Change (IPCC), World Energy Council (WEC), the European Commission, and most recently the Global Energy Assessment (GEA).

MESSAGE combines technologies and fuels to construct ‘energy chains,’ making it possible to map energy flows from supply sectors right from resource extraction, primary, secondary and final energy sources to various demand sectors (energy services in building, industry, transport, etc.). The underlying mathematical formulation is a linear programming problem which minimizes costs to satisfy energy demand under different constraints of fuel cost, fuel quantity, resources extraction costs and quantity, limits on emissions, etc. In this way, multiple scenarios are created using interlinked energy chains to understand the implications of important policy changes on various demand sectors.

The ability of the MESSAGE model to perform cost optimization within the model gives it an advantage over the IESS model previously developed by Niti Aayog, and builds on the same. However, the IESS model has its own advantages, as it can provide microlevel data of the energy sector. For instance, in transport sector’s demand for energy, IESS can give details on demand by modal shares for passenger transport. i.e. road, rail or air. Road sector’s demand for energy is further disaggregated by type of vehicle, bus, omnibus, car, two wheelers, three wheelers, and taxi. On the other side, the MESSAGE model when used by itself, describes the supply side of the energy system in greater detail. However, the demand side in MESSAGE is aggregated and exogenous (i.e., it does not respond to dynamics in the model). MESSAGE model just matches the transport sector’s aggregate demand with various fuel supply options to arrive at the most cost efficient way of satisfying that demand. But when MESSAGE is used in conjunction with its TRANSPORT module, it incorporates transportation sector’s modal split, cost, and value of time into the model.

More sophisticated energy modeling is possible when the MESSAGE model is used in conjunction with other models of IIASA. For instance: MESSAGE, when used with MACRO model, is able to create demand endogenously within the model. MACRO model receives prices related to energy supply from the MESSAGE model; from these, it supplies demand functions for MACRO so that the overall energy demand can be adjusted. MESSAGE along with ACCESS model provides a modeling framework for analyzing effective policy choices to improve the penetration of modern cooking fuels among the poor. Other models that can be used in conjunction with MESSAGE are GLOBIOM (an integrated agricultural, bioenergy and forestry model), MAGICC (a simple climate model), and GAINS (GHG and air pollution mitigation model) among others. These models have been used by several countries for their integrated energy policy making. GLOBIOM-BRAZIL and GLOBIOM-EU have been designed by regional institutes to arrive at policy recommendations.

Thus, Niti Aayog’s venture into energy modeling using MESSAGE opens up a universe of future research possibilities with the potential to give novel suggestions for India’s integrated energy policy making. At present, the Niti Aayog’s energy modeling team is working towards developing an India-specific MESSAGE model. The results will be made available on public domain soon.

Disclaimer: NITI blogs do not represent the views of either the Government of India or NITI Aayog. They are intended to stimulate healthy debate and deliberation.