Abstract for: Application of system dynamics for design of national energy and climate plan

EU member states are obliged to design national energy and climate plans which show how countries will reach targets for energy savings and the share of renewable energy sources in the total final energy consumption. Dynamic problem is that the rates of energy efficiency improvements and increase of the share of renewable energy sources in the total final energy consumption, resulting from the existing policy instruments, may not be sufficient to reach the targets set in the plans. The presented study addresses that dynamic problem by using dynamic hypothesis that policy instruments have to address not only technological and economic factors but also social factors which are included in structure of the modeled system. System dynamic modeling was used as the method to analyze several policy scenarios and find the policy instruments which enable to reach the targets. The model was applied for Latvia but can be used also for other countries. Results show that two of the five policy scenarios can provide reaching both targets - cumulative energy savings and share of renewable energy sources in the total final energy consumption. This study also demonstrates that system dynamics modeling can be successfully used in design of a national energy and climate plans.