An integrated approach to ukrainian energy system development modelling

Abstract

This article presents the results of the contemporary theoretical and methodological approaches to the energy systems’ modelling investigation. It is proved that adequate consideration of the economy-wide effects through single class of models is not always conceivable, since such approaches exceptionally focus either on technological or macroeconomic visions of the energy sector. Accordingly, this paper justifies the expediency of integrated modelling tools application for the analysis of energy policy measures in Ukraine, furthermore theoretical and methodological approaches to the energy system models and economic models linkage are studied. Based on the authors’ energy system model “TIMES-Ukraine” and recursive dynamic general equilibrium model this paper presents an integrated modelling tool that can serve as an effective methodological support in solving a number of strategic planning problems in the energy sector, including:investigation of the energy balance optimization options in order to ensure environment conservation and Ukraine’s low carbon economic development, considering cross-sectoral linkages’ structure, energy efficiency and energy conservation measures implementation, renewable energy development, ecological standards compliance, etc.investigation of the FEC development scenarios influence on the wide range of micro- and macroeconomic indicators, including households’ income and expenditure, GDP, industrial output, public finance, foreign economic activity, etc.optimization of public mechanisms designed to meet international commitments to protect the environment and combat climate change, taking into account their impact on producers, end-users, general government and dynamics of macroeconomic indicators;energy sector subsidization policy adjustment, aimed at the transition to market prices in a socially acceptable manner, while ensuring the viability of energy companies.