FTT:Power : A global model of the power sector with induced technological change and natural resource depletion

TL;DR

This paper presents FTT:Power, a dynamic model of the global power sector that incorporates technological change and resource depletion, enabling analysis of decarbonization pathways through nonlinear, path-dependent technological transitions.

Contribution

It introduces a novel modeling approach using coupled differential equations to simulate technological change and resource use in the power sector, integrating market competition and resource depletion.

Findings

Mitigation scenarios lead to successive technology transitions.

Constant carbon price results in system stagnation.

Model captures nonlinear, irreversible technological changes.

Abstract

This work introduces a model of Future Technology Transformations for the power sector (FTT:Power), a representation of global power systems based on market competition, induced technological change (ITC) and natural resource use and depletion. It is the first component of a family of sectoral bottom-up models of technology, designed for integration into the global macroeconometric model E3MG. ITC occurs as a result of technological learning produced by cumulative investment and leads to highly nonlinear, irreversible and path dependent technological transitions. The model uses a dynamic coupled set of logistic differential equations. As opposed to traditional bottom-up energy models based on systems optimisation, such differential equations offer an appropriate treatment of the times and structure of change involved in sectoral technology transformations, as well as a much reduced computational load. Resource use and depletion are represented by local cost-supply curves, which give rise to different regional energy landscapes. The model is explored for a single global region using two simple scenarios, a baseline and a mitigation case where the price of carbon is gradually increased. While a constant price of carbon leads to a stagnant system, mitigation produces successive technology transitions leading towards the gradual decarbonisation of the global power sector.