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What is ENERGY 2020?

ENERGY 2020 is an integrated multi-region 

energy model that provides a complete and 

detailed simulation of supply and demand 

sectors for all types of fuels. With every 

aspect of the energy market modeled in 

detail, ENERGY 2020 has become an industry 

leader in analyzing and forecasting the 

impacts of a variety of policy considerations

on the energy market and resulting 

emissions. When integrated with a 

macroeconomic model, ENERGY 2020 

becomes a powerful tool for estimating the 

impacts of energy policy on the economy as 

a whole.

ENERGY 2020 is parameterized with local 

data for each region, state, or province as 

well as all the associated energy suppliers it 

simulates. This allows the model to capture

the unique characteristics (physical, 

institutional and cultural) that affect how 

people make choices and use energy. Model 

inputs and assumptions can be customized 

by the client in order to scale the model to 

their desired level of analysis. 

How does ENERGY 2020 work?

ENERGY 2020 is a system dynamics model 

that incorporates a complex methodology to 

simulate the feedback effects between 

supply and demand for thirty specific types 

of fuel and the resulting effects on 

inventories for dozens of different 

pollutants. The model uses an extensive

economic database to examine historical 

usage patterns to generate the selection 

process for each fuel type, capturing the

feedback among energy consumers, energy 

suppliers, and the economy using Qualitative 

Choice Theory and cointegration. For 

example, a change in price impacts demand 

which in turn impacts future supply and 

price. Increased economic activity increases 

demand; increased demand increases 

investment in new supplies. New 

investment has impacts on both the 

economy and energy prices. 

ENERGY 2020 is designed to model the 

economy at the level of detail needed to 

produce an accurate energy simulation. The 

default model simulates demand by three 

residential categories (single family, multifamily, and other family), over sixty NAICS 

commercial and industrial categories, and 

eight transportation services. There are 

approximately six end-uses per category and 

six technology/mode families per end-use. 

Currently the technology families 

correspond to six fuels groups (oil, gas, coal, 

electric, solar and biomass) and thirty

detailed fuel products. The transportation 

sector contains forty-five modes including 

various type of automobile, truck, off-road, 

bus, train, plane, marine, and alternativefuel vehicles. More end-uses, technologies, 

and modes can be added as data allows.
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In addition, ENERGY 

2020 performs 

detailed modeling of 

supply sectors, 

including an

endogenous detailed 

electric supply 

simulation of 

capacity 

expansion/constructi

on, rates/prices, load shape variation due to 

weather, and changes in regulation. 

A sophisticated dispatch routine selects critical 

hours along seasonal load duration curves as a 

way to provide a quick but accurate 

determination of system generation. 

The ENERGY 2020 model includes pollution 

accounting for both combustion (by fuel, enduse, and sector) and non-combustion, and nonenergy (by economic activity) for Sulphur Oxides 

and Hexafluoride, Nitrogen and Nitrous Oxides, 

Carbon Monoxide and Dioxide, Methane, 

Particulate Matter of various types, Volatile 

Organic Compounds, Perfluorocarbon and 

Hydroflurocarbon, Mercury, Ozone, and 

Ammonia. Each pollutant is calculated at the 

state and provincial level by each economic 

sector, including allowance trading at the 

national and international levels.

What can ENERGY 2020 do?

ENERGY 2020 has been utilized by clients for a 

broad spectrum of analytical work related to 

energy usage and emissions

Examples of what ENERGY 2020 is designed to 

examine include, but is not limited to, the 

following:

 Impact of carbon taxes on energy prices, 

including variables for banking, offsets, 

allotment trading, and the impacts on the 

economy when integrated with a 

macroeconomic model.

 Effects of emissions standards on energy 

prices and emission inventories, including 

CAFE equivalent standards for the 

transportation sector.

 Simulation of utility deregulation scenarios.

 Impacts of energy supply changes, including 

migration to cleaner energy sources, the 

effect of constructing new power plants on 

the electric market, and the potential 

impacts of supply shock scenarios.

Who has used ENERGY 2020?

ENERGY 2020 has been used by a wide variety of 

groups, including federal agencies, state 

governments, and regional power 

administrations. Organizations that have used 

or are currently using ENERGY 2020 include the 

following:

 U.S. Environmental Protection Agency, for 

the analysis of impacts of proposed Kyoto 

initiatives.

 Environment Canada

 The Western Climate Initiative

 California Air Resources Board

 Bonneville Power Administration

 The Canadian National Energy Board

 Hawaii Department of Business, Economic 

Development, and Tourism

 Bonneville Power Administration

 The Northwest Power and Conservation 

Council

 Numerous state climate analysis and energy 

commissions, including Wisconsin, Vermont, 

Michigan, and Illinois. 

 The Canada National Roundtable on Energy 

Efficiency
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In addition, ENERGY 2020 has been used in 

Eastern Europe and in South America to analyze 

the energy markets of developing nations.

Why use ENERGY 2020?

Forecasting the energy economy, ENERGY 2020 

is designed around endogenous decision making, 

where the process of selecting fuels and devices 

is robustly calculated within the model. This 

allows the model to dynamically forecast the 

impacts of new technologies instead of relying 

on exogenous assumptions regarding technology 

adoption, making ENERGY 2020 a powerful tool 

for analyzing energy usage and emissions into 

the distant future.

ENERGY 2020ialso 

adapts the decision 

making process for 

each economic actor 

to simulate realworld factors. For 

instance, a utility 

dispatches electricity 

optimally, usually 

with the help of a linear program; ENERGY 2020 

uses this same methodology when simulating 

the dispatch for plants into the future. However, 

a consumer choosing a new appliance or car 

generally does not act optimally, but rather 

makes a decision based on the limited 

information available to him or her. ENERGY 

2020 is designed to reproduce this decision 

making process, allowing it to capture the 

nuances of device selection that a standard 

optimization model is likely to miss by simulating 

actual, not assumed, responses.

Through its widespread use in the public sector 

over the past couple of decades, ENERGY 2020’s 

methodology has been rigorously tested both by 

its clients and by the public at large. To date, the 

system dynamics approach used by ENERGY 

2020 has withstood all scrutiny, allowing the 

client the security of depending on time-tested 

reliability of the model when releasing the 

results to the public.

About Systematic

Solutions, Inc.

Based in Ohio, Systematic Solutions, Inc. has 

provided analytical work related to energy and 

emission policy for over a quarter of a century.

We are a small firm dedicated towards being 

responsive to the needs of each client. As a 

result, SSI offers a variety of consulting options 

for ENERGY 2020 depending on the particular 

needs of each client. Previous contracts have 

ranged from in-house policy analysis to longterm consulting and support for the 

independent use of the model by utilities and 

government agencies.

In addition to the development and support of 

ENERGY 2020, SSI is available as a consultant for 

economic policy and analysis.

For more information, please visit our website at 

www.energy2020.com or e-mail 

SSI@ENERGY2020.com.

 

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