1 Introduction

1Energy scenarios have been used for more than three decades to develop coherent stories about alternative futures8. Scenarios help decision-makers in government and industry to derive strategies and also challenge existing plans or thinking. Scenarios do not aim to forecast or predict the future, but provide coherent and credible stories about possible future pathways. Since the future evolution of many factors influencing the energy system, e. g. oil price development, is inherently uncertain, scenarios do not try to remove the uncertainty by predicting future outcomes, but explore possible options for decision-making under various, often uncertain and uncontrollable, future conditions in the energy sector.

2Due to the longevity of many technology investments in the energy sector, scenarios typically cover a time horizon of several decades. Depending on the question being analysed, scenarios may also cover a shorter time horizon. The following discussion focuses on long-term scenarios in the energy system, i. e. the decision space being explored includes options to build new capacity and is not limited to the use of the existing capacity stock.

3Different types of scenarios can be distinguished based on the underlying question being targeted by the analysis. Normative scenarios demonstrate the options required to reach a specific target or goal. A scenario analysing the technology portfolio and energy mix needed to reach a given future CO₂ reduction target is an example for a normative scenario. Explorative scenarios represent a further scenario type. They aim at analysing the impact of specific decisions or measures, e. g. what is the impact of introducing a renewable quota in the power sector on its CO₂ emissions. Normative scenarios can be referred to as how-to scenarios, whereas explorative scenarios look at what-if type of questions. In addition, one can identify a third type of scenario, which explicitly aims at studying the impact of uncertainty in the scenario assumptions, e. g. future gross domestic product (GDP) growth, by developing scenario variants for different assumptions for the uncertain scenario assumptions, e. g. a low and high GDP growth variant. The three types of scenarios are often combined in a scenario analysis. An example is a normative scenario looking at how to reach a CO₂ reduction target. An explorative variant of this mitigation scenario may study the role of specific technology options in reaching the mitigation target, e. g. what are the cost effects, if carbon capture and storage (CCS) is not available as a mitigation option.

4Scenarios are initially formulated in a qualitative form as a storyline, but then, due to the complex nature of the energy system, often analysed in a quantitative way using mathematical models of the energy system. Energy models describe components of the energy system, e. g. technologies, energy carriers and emissions, and their interdependencies in a systematic way. A single model is often not capable of covering all aspects which should be addressed by the scenario analysis. For example, a technology-oriented model, the so-called bottom-up model, can provide detailed information on energy technologies, but cannot provide insights on economic impacts, e. g. GDP or employment effects. Economic models, so-called top-down models, are needed to analyse these issues. Due to the reliance on energy models in the scenario analysis, the capabilities and possible limitations of the applied model approaches should be included in the presentation and discussion of scenario results.

5In the following, an overview of the ETP 2010 scenarios, the underlying methodology in deriving the scenarios and the use of these scenarios for the development of technology roadmaps will be given. Finally, future research needs in scenario analysis and modeling are discussed.

2 Energy scenarios and modelling in the Energy Technology Perspectives 2010

6ETP 2010 analyses how low-carbon energy technologies can contribute to deep CO₂ emissions reduction targets. Using a techno-economic approach that assesses costs and benefits, the book examines least-cost pathways for meeting energy policy goals while also proposing measures to overcome technical and policy barriers. Specifically, ETP 2010 examines the future fuel and technology options available for electricity generation and for the key end-use sectors of industry, buildings and transport.

7ETP 2010 studies and compares various scenarios. The ETP 2010 Baseline scenario follows the Reference scenario to 2030 outlined in the World Energy Outlook 2009 [IEA 2009a], and then extends it to 2050. It assumes governments introduce no new energy and climate policies. In contrast, the BLUE Map scenario (with several variants) is target-oriented: it sets the goal of halving global energyrelated CO₂ emissions by 2050 (compared to 2005 levels) and examines the least-cost means of achieving that goal through the deployment of existing and new low-carbon technologies. The BLUE Map scenario also enhances energy security (e. g. by reducing dependence on fossil fuels) and brings other benefits that contribute to economic development (e. g. improved health due to lower air pollution).

8In the BLUE Map scenario, CO₂ emissions in 2050 are reduced to 14 Gt, around half the level emitted in 2005. This means emissions are 43 Gt lower in 2050 than the 57 Gt CO₂ projected in the Baseline scenario. Achieving these CO₂ emissions reductions will require the development and deployment of a wide range of energy-efficient and low-carbon technologies across every sector of the economy (Figure 1). End-use efficiency improvements in the use of fuels and electricity, and power sector measures dominate the short-and medium-term emissions reductions. But to achieve the deeper emission cuts needed by 2050, these measures will need to be supplemented by the widespread introduction of new technologies such as electric vehicles (EVs) and CCS between 2030 and 2050.

9The primary tool used for the scenario analysis is the IEA ETP model. This global 15-region model permits the analysis of fuel and technology choices throughout the energy system, from energy extraction through fuel conversion and electricity generation to end-use. The model’s detailed representation of technology options includes about 1000 individual technologies. The ETP model belongs to the MARKAL family of bottom-up modelling tools [Fishbone & Abilock 1981]. MARKAL has been developed over the past 30 years by the Energy Technology Systems Analysis Programme (ETSAP), one of the IEA Implementing Agreements [Loulou et al. 2004]. The ETP-MARKAL model uses optimisation to identify least-cost mixes of energy technologies and fuels to meet the demand for energy services, given constraints like the availability of natural resources.

10The ETP model has been supplemented with detailed demand-side models for all major end-uses in the industry, buildings and transport sectors. These models were developed to assess the effects of policies that do not primarily act on price. These demand-side models explicitly take capital stock turnover into account, and have been used to model the impact of new technologies as they penetrate the market over time.

11To refine the analysis on the regional or country level within the global ETP 2010 scenarios, the IEA secretariat cooperated with national modelling teams and energy experts to enhance the scenario analysis for China, India, OECD Europe and the United States, which together accounted for more than 60% of global energy-related CO₂ emissions in 2007. The insights from the national or regional modelling groups, which analysed the Baseline and BLUE Map scenarios with their models, have been integrated in the global ETP scenario analysis.

12Beyond the scenario analysis itself, the results of the BLUE Map scenario serve as starting point for the development of technology roadmaps to help governments and industry to accelerate the development and deployment of clean energy technologies. The BLUE Map scenario defines the deployment goal which should be achieved for a particular technology by 2050. Based on the scenario results, a technology roadmap then develops a growth path from today to 2050, and identifies technology, financing, policy and public engagement milestones that need to be achieved to realise the technology’s full potential.

13Figure 2 from the CCS roadmap illustrates the evolution of CCS projects in power generation, industry and the upstream sector between 2010 and 2050 [IEA 2009b]. OECD countries must lead in the first decade, but the technology must quickly expand to the developing world: by 2050, 65% of the projects must be located in non-OECD countries.

14Besides the CCS roadmap, the IEA has published roadmaps for wind, solar photovoltaic, concentrated solar power, electric vehicles, the cement sector and nuclear energy. Work on roadmaps for other low-carbon energy technologies has begun, including bioenergy, biofuels, energy efficiency in the buildings sector, geothermal energy and smart grids.

3 Future research challenges

15Achieving deep emission cuts as envisaged in the BLUE Map scenario requires a fundamental transformation of the energy system. More efficient use of energy on the end-use side can provide substantial reductions in CO₂ emissions. Power generation needs to be essentially decarbonised through a mix of renewables, nuclear and CCS. Reducing emissions in the transport sector requires new advanced vehicle and fuel production technologies, such as electric vehicles or 2^nd generation biofuels. Several issues of this transformation of the global energy system need to be better understood and represented in the scenario analyses:

• The electricity system has to become more flexible and smarter to integrate an increasing amount of variable renewables and to electrify the transport sector. Smart grids are a promising concept to enable these changes, but more work is needed to better describe the interactions between electricity generation, grid and consumers. The IEA is currently developing a roadmap to address some of the questions related to the introduction of smart grids.
• Regional aspects of an energy system, e. g. climate conditions, geographic distribution of energy resources and consumers, are important characteristics influencing the available future options and strategies. The ETP 2010 scenario analysis tried to capture some of the region-specific aspects in the global scenario analysis by co-operating with national or regional modelling and energy experts for some of the larger energy-consuming countries/regions. This regional analysis should ideally be expanded to other world regions, but the challenge lies in ensuring consistency among the national scenario studies and in integrating them into a global scenario.
• Reaching the full mitigation potential of energy-efficient and low-carbon energy technologies will depend to a significant extent on influencing consumers’technology choices and behaviour. An improved understanding of the human dimensions of energy consumption, particularly in the buildings sector and in personal transport, can help policy makers to catalyse and amplify technology-based energy savings. ETP 2010 discusses behavioural aspects, but the analysis of consumer behaviour has to be expanded and better reflected in the scenario analysis.
• Energy scenarios often focus on energy and emission-related impacts and neglect other environmental effects, e. g. land and water use of energy technologies. Local protests against energy projects, e. g. hydro dams or overland transmission lines, show that concerns in the population about the possible impacts of energy technologies have to be better addressed in the scenario and decision-making processes.
• The material requirement needed to produce energy technologies and the related energy and environmental impacts are often not included in the scenario analysis. Life-cycle analysis (LCA) provides a detailed assessment of the impacts of a technology from its production, over its use to its decommissioning. But the analysis is often based on static factors for energy and environmental impacts. A better linkage between LCA and scenario analysis is needed.

16Besides improving the scenario analysis itself, communicating and presenting energy scenarios and their results to policy-makers, industry experts and the public is crucial for the decision-making process and the debate about strategies in the energy system. Often scenarios are misunderstood as projections or forecast of the future, though they should be considered as possible future developments to demonstrate the available options and their implications in the decision process. The internet may be one communication channel to present scenarios in a more interactive manner to a broader audience. Thus, an improved understanding of energy scenarios may not only support the decision-making process itself, but also provide the involved stakeholders with a better knowledge of the underlying interdependencies in the energy sector.