Data Preparation in
Energy-Economy-Agriculture Models
Ron Sands
Joint Global Change Research InstituteBattelle – PNNL – University of Maryland
AIM Training Workshop 2006
Tsukuba, Japan
18 October 2006

Introduction (1)Top-down economic modeling for environmental policy
analysis requires several types of data
Input-output tablesz National income accounts
z Energy balancesz Energy technology characteristicsz Agriculture and land use is increasingly important for questions
related to climate policyzData collection effort depends on questions to be asked
Expand detail in sectors of interest and collapse detail in other areasz For some questions, especially on a global scale, level of detailprovided by GTAP may be sufficientz For single-country studies, especially those focused on specificenergy sectors, you may want to collect and process local dataz2

Introduction (2)Importance of physical flows
zEnergy Demand for secondary fuels
 Efficiency of transformation from primary to secondary fuels
 Implied demand for primary fuels and resulting emissions

zAgricultural products Demand for food in calories
 Efficiency of transformation from primary agriculture to animal products
 Implied demand for land

Coverage of all major classes of greenhouse gas mitigation
options
Energy efficiency
z Fuel switchingz CO2 capture and storage (CCS)z Non-CO2 greenhouse gasesz Land management, biofuels, carbon emissions from land usechangez3

Energy-Economy Data
Input-output tables
Each row is an input to productionz Each column is a production activity or final demand activity(consumption, investment, international trade)z Can be constructed in either quantity or value terms
zNational income accounts
Income must equal expenditure for various accounts: producers,consumers, investment, tradez Can be expressed in a matrix where row sums equal column sumszEnergy balances
Essentially an input-output table for energy
z Expressed in energy quantitieszEnergy technology characteristics
Efficiency in physical termsz Levelized cost to produce one unit of output (e.g., kWh)z4

Structure of Input-Output Table

M

Total output of commodity i

Value added sold directly
to final demand

Tot. val. add.

CIGX<----Ammount ofcommodity i usedby used by makersof commodity j

Commodity iK

Value addedL------------ -----------------------------------

Commodities

Makers of commodity j------------------------------------------------------------Makers of commodities--------------------------------Final demand---------

IBT

Total cost for makers of commodity j

National Accounts

5Structure of Energy Balance Table
energy inputs (fuels)
productionimports
exportssources

electricity generation
oil refining
cokingenergy transformationagricultureindustrytransport
residential buildingscommercial buildings

final consumption

6Engineering cost assumptions for electricity generation
technologies in SGM-USA (1990 US$)

Parameter

unit

Operating in model base year?

oilnatural gas
single
cycle
NGCC

PC

IGCC

nuclearhydrowind

yes

yes

yes

no

yes

yes

no

no

coal

renewables

Economic assumptions
fuel priceinterest rate$/GJ
percent

4.19
10%

2.26
10%

2.26
10%

0.97
10%

0.97
10%

10%

10%

10%

Capital costpurchase cost of capital
plant factor
capital lifetime
interest plus depreciationlevelized capital cost$/kWpercent
years
percent
mills/kWh

500
20%
20
11.7%
33.5

500
40%
20
11.7%
16.8

80075%
20
11.7%
14.3

1,15075%
20
11.7%
20.6

1,40175%
20
11.7%
25.0

1,00075%
20
11.7%
17.9

1,00075%
20
11.7%
17.9

1,200
20%
20
11.7%
80.5

Fuel cost
efficiency
fuel cost per kWhpercent
mills/kWh

32%
47.6

36%
22.9

50%
16.4

32%
10.8

41%
8.6

Operations and maintenance costmills/kWh

2.5

2.5

7.4

7.4

7.4

15.0

5.0

7.4

Levelized cost per kWh (total)

mills/kWh83.6

42.138.1

38.7

41.0

32.9

22.9

87.9

CCS operational in base year?
capture efficiency
CO2 captured
capital cost
O & M costenergy required

percent
kg-CO2/kWh$/kg-CO2/h
mills/kg-CO2
kWh/kg-CO2

no90%
0.328
921
5.20
0.354

no90%
0.728
521
5.56
0.317

no90%
0.711
305
2.65
0.194

7

Levelized Cost of Electricity as a
Function of Carbon Price160

levelized cost (mills per kWh)

140

IGCC

120

100
IGCC captureand disposal

80

NGCC captureand disposal

60
NGCC

40

200050

100

150

200

250

300

350400carbon price (2000 US$ per tC)

8

Social Accounting Matrix (SAM)
as an Organizing Tool
Matrix structure to hold all benchmark (base-year)
data
Three major componentsz National income accounts (condensed SAM)
z Use table (commodity x activity)z Make table (activity x commodity)

Economic models usually have single-output
production functions
Matrix algebra can be used to transform use andmake tables so that each activity produces only
one commodity
9Condensed Social Accounting Matrix (1990 USA)
activities
activities

commodities

primary factors

enterprises

households government

capitalrest of world

GROSS_OUTPUT

9,790,599

9,790,599

commodities

INTERMEDIATE_INPUTS

PCONS

GCONS

INVESTEXPORTS

4,269,660

3,760,223

847,785

960,864

543,179

primary factors

VALUE_ADDED

10,381,711
5,520,940

5,520,940

enterprises

OVA

1,823,076

1,823,076

households
government

LABOR

DIVIDENDS

GTR

3,248,246

1,068,577

808,000

IBT

CIT

PIT+SSTAX

449,618

140,500

1,143,300

capitalrest of world

5,124,823
1,733,418

RE

PSAV

GSAV

NET_BORROWING

613,999

221,300

77,63347,933960,865

IMPORTS

591,112591,112

9,790,600

10,381,711

5,520,940

1,823,076

5,124,823

1,733,418

960,864

591,112

Note: numbers in blue are derived directly from an input-output table

10Use and Make Tables
An input-output table is constructed from a use (input) table
and a make (output) table
Some statistical agencies provide the original use and make tablesz Some agencies provide only the combined input-output table
zUse table
Looks like an input-output tablez But there may be more than one production activity for someproducts (e.g., several ways to generate electricity)z

Make table
Each row is a production activityz Each column is a product or commodity
z11

1997 energy make table for China (mtoe)

Oil and Gas Extraction
Coal Mining
Coke Ovens
Blast Furnaces
Petroleum Refineries
Petrochemical Industry
Gas Works
Public Electricity Plants
Autoproducer Electricity Plants
Heat Plants
CHP Plants
Production by Fuel

NaturalCrude OilGas
160.7
21.4

Coal

Gases from
Coal
RefinedCoke Transform.Petroleum Electricity

Heat713.6
90.3

11.7
13.7
164.5

3.9

0.7
95.8
1.7
28.1

160.7

25.3

713.6

91.0

25.4164.5

97.6

28.1

12Hybrid Use Table
Combines economic input-output data, energy balances,and energy technology characteristics into one table
Sequence of calculations (used in SGM model)
Aggregate economic use and make tables to desired level of detailz Construct energy use and make tables from energy balance tables
z Check that energy technology data is consistent with energybalancesz Replace energy rows of economic use table with corresponding
data from energy balances (hybrid use table)z Re-balance hybrid table in value terms so that row sums matchcolumn sumsz Insert energy technology dataz13

factorsjoulesjoulesjoulesjoulesrealdollars

real
dollars

real
dollars

real
dollars

land
labor
capitalrealdollars

real
dollars

real
dollars

imports

exports

investment

government

other
industries

consumergas distribution

petroleum refining

hydronuclearcoal-fired

gas-firedoil-firedcokecoal production

electricity

final
demandactivities

otherindustries

commodities

crude oilnatural gas
coal
coke
electricity
refined petroleum
distributed gas

gas production

oil production

Structure of Hybrid Use Table

14

commodities
factors

crude oilnatural gas
coal
coke
electricity
distributed elec.
refined petroleum
distributed gas
crude steel
shaped steel

joulesjoulesjoulesjoules

tons

tons

tons

tons

other
commodities

real
currency

realcurrency

realcurrency

realcurrency

land
labor
capitalrealcurrency

realcurrency

realcurrency

imports

exports

investment

other
activities

consumershaped steel

DRP

EAF

BOF

crude steel

government

final
demandactivities
gas distribution

petroleum refining

elec. distributionhydronuclearcoal-fired

gas-firedoil-firedelectricity

cokecoal production

gas production

oil production

Hybrid Use Table with Steel Technologies

15Documentation for
Second Generation Model
SGM documentation can be found at:
http://www.epa.gov/air/sgm-sab.html
The Second Generation Model: Model Description and Theory,
PNNL-15432 (PDF, 51 pp, 1566 KB)
The Second Generation Model: Data, Parameters, andImplementation, PNNL-15431 (PDF, 39 pp, 356 KB)
The Second Generation Model: Future Directions for Model
Development, PNNL-15437 (PDF, 10 pp, 126 KB)

16

Agriculture-Forestry Data
Agriculture-Forestry Dataz Food balancesz Land use dataz Forest production

Following slides provide a brief introduction to thisdata at a global level
United Nations Food and Agriculture Organization(FAO) is the primary source of data
Top-down general equilibrium models are being
extended to include agriculture and forestry
17

1990 Global Food Balance (kcal per person per day)

Crops
Processed Crops
Animal Products

Activity
ProcessedCrops
Crops
344
748
0000

AnimalProducts
1,041
237

Final Demand
OtherFood
Uses
1,726
51
532
80
382
38

Stock
Change49-40Total
Production
3,959
609
457

18

Food Consumption by AgLU Region
kcal per person per day
01,000Crops

Processed Crops

2,000

3,000

4,000

United States
CanadaOECD EuropeJapan
Australia and New ZealandFormer Soviet Union
China and Centrally Planned Asia
Middle EastAfrica
Latin America
Other Asia
Eastern EuropeKorea
India
Animal Products
19Land Use (without carbon policy)
1098billion hectares

7

Unmanaged

65
Managed Forest

43Pasture2
101990

Crop Land
2005

2020

2035

2050

2065

2080

2095
20

Summary
Benchmark data sets for top-down general equilibrium
models can be represented as social accounting matrices(SAMs)
The SAM structure is flexible so that detail can be
expanded in areas of interest and collapsed elsewhere
Bottom-up energy technology information can be placed ina SAM to represent interaction with the rest of the economy
Modelers are working to include agricultural and forestry
production in general equilibrium modelszImportant for analysis of climate policy
 GHG emissions from agriculture CO2 sequestration in forests and soils
 Climate impacts on agriculture and forest production
 Potential for biofuels

GTAP effort
z Energy Modeling Forum (EMF-22) land use subgroupz21