Within the context of the research activities of the Horizon 2020 Sentinel Project, a new report is published focusing on the improvements made in the three economic impacts models, namely, the European Electricity Market Model (EMMA), the WEGDYN computable general equilibrium (CGE) model and the Business Strategy Assessment Model (BSAM). These three models aim to capture micro- and macroeconomic impacts of the energy transition. Improvements were made to the structure and functioning of these three models to match user needs.
To identify the needs of different stakeholder groups, SENTINEL project partners implemented a multi-methods approach including qualitative interviews, an online survey, and a stakeholder workshop. 32 interviews were conducted with four different stakeholder groups: (i) policymakers, working in the governments/European Commission or governmental organizations; (ii) scientists and analysts, working in academia or consulting; (iii) energy industry representatives, including transmission and distribution system operators; and (iv) representatives of non-governmental organizations.
Based on the literature review on modelling trends and paradigms, the expertise of the involved project partners, and considering user needs, the following key areas for enhancing the capabilities of economic impact models were identified:
- Exploration of distributional effects at the level of economic sectors (incl. energy) and private and public households by improving the WEGDYN model.
- Exploration of the effects of (de)commissioning and (in) flexible energy production at a higher resolved technological level by adding these features to the EMMA model.
- Evaluation of the evolution of the electricity mix as RES technologies’ capacity increases in the generation portfolio by using the improved BSAM model.
- Provision of a comprehensive, consistent and tractable assessment of the trade-offs and synergies related to the energy transition (distributional effects, emission reduction targets, competitiveness, etc.) by soft linking of EMMA, BSAM and WEGDYN.