Policy Modeling for Industrial Energy Use

Historically most energy models were reasonably equipped to assess the impact of a subsidy or change in taxation. However, these tools are insufficient to assess the impact of more innovative policy instruments. In this paper we evaluate the models used to assess future industrial energy use. We explore approaches to engineering-economic analysis that could help improve the realism and policy relevance of engineering-economic modeling frameworks. We also explore solutions to strengthen the policy usefulness of engineeringeconomic analysis that can be built from a framework of multi-disciplinary cooperation. We focus on the so-called ‘engineering-economic’ (or ‘bottom-up’) models, as they include the amount of detail that is commonly needed to model policy scenarios. We identify research priorities for the modeling framework, technology representation in models, policy evaluation and modeling of decision-making behavior.