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### What is ENERGY 2020?
ENERGY 2020 is an integrated multi

- region energy model that provides a compl ete and detailed simula tion of supply and demand
sectors for all types of fuel s. With every aspect of the energy market modeled in detail, ENERGY 2020 has become an industry leader in analyzing and forecast ing the impacts of a variety of policy considerations on th e energy market and resulting

em issions . 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 captur e the unique characteristics (physical, institutional and cultural) that affect how people make choices and use energy. Model inputs and assumpt ions 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 effect s 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 select ion process for each fuel type , captur ing the feedback among energy consumers, energy suppliers, and the economy using Qualitative Cho ice Theory and cointegration. For example, a chang e in price impacts demand which in turn impacts future supply and

price. Increased economic activit y increases demand; increased demand increas es i nvestment in new supplies. N ew 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, mul ti

family, and other family ), over sixty N AICS commercial and industrial categories, a nd eight transportation servic es

. 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, ele ctric, solar and biomass) and thirty detailed fuel products. The transportation sector contain s forty

- five modes including various type of automobil e, truck, off

- road, bus, train, plane, marine , and alternative

fuel v ehicles. More end

- uses, technologies, and modes can be added as data allow s

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In addition, ENERGY 2020 pe rforms detailed modeling of supply sector s , including an endogenous detailed electric supply simulation of capacity expansion/constructi on, rates/pri ces, 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 2 020 model includes pollution accounting for both combustion (by fuel, end

use, and sector) and non

- combustion, and non

energy (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 , Per fluorocarbon and Hydroflurocarbon, Mercury , Ozone, and Ammonia. Each pollutant is calculated at the state and provincial level by each economic secto r, including allowance trading at the

n ational and international levels.

What can ENERGY 2020 do?
ENERGY 2020 has been utilized by clients for a broad spectrum of analy tical work related to energy usage and emissions
Examples of w hat 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 th e impacts on the economy when integrated with a macroeconomic model

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 Effects of emissions standards on energy prices and emission inventories, including CAFE equivalent standards for the transportation sector

.

 Simulation of utility deregulation scenarios

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 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 D evelopment, 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 Eff iciency3

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 w ithin 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 2020 i also adapts the decision making process for each economic actor to s imulate real

world 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 bas ed 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 it s 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 202 0 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 S ystematic Solutions, Inc.
Based in Ohio, S ystematic 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. P revious contracts have ranged from in

- house policy analysis to long

term consulting and support for the independent use of the model by utilities and government agencies.
In addition to the development an d support of ENERGY 2020, SSI i s available as a consultant for economic policy and analysis

.
For more inform ation, please visit our website at

www. energy 2020 .com or e
- mail SSI @ENERGY2020.com

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