World Energy Projection System (WEPS): 

Overview 

Independent Statistics & Analysis

www.eia.gov

U.S. Department of Energy

Washington, DC 20585

Last Updated 2020
U.S. Energy Information Administration | World Energy Projection System: Overview ii

This report was prepared by the U.S. Energy Information Administration (EIA), the statistical and 

analytical agency within the U.S. Department of Energy. By law, EIA’s data, analyses, and forecasts are 

independent of approval by any other officer or employee of the U.S. Government. The views in this 

report therefore should not be construed as representing those of the U.S. Department of Energy or 

other federal agencies.

Contents

Introduction .................................................................................................................................................. 2

Historical Data............................................................................................................................................... 3

Global Activity Model.................................................................................................................................... 4

Residential Demand Model........................................................................................................................... 4

Commercial Demand Model ......................................................................................................................... 4

Industrial Demand Model ............................................................................................................................. 4

Transportation Demand Model .................................................................................................................... 4

Electricity Model ........................................................................................................................................... 5

District Heat Model....................................................................................................................................... 6

Hydrocarbon Supply Model .......................................................................................................................... 6

Coal Supply Model ........................................................................................................................................ 7

Greenhouse Gases Model............................................................................................................................. 8

Convergence Model...................................................................................................................................... 8
U.S. Energy Information Administration | World Energy Projection System: Overview 2

Introduction

The World Energy Projection System (WEPS) generates projections of energy consumption, prices, and 

production for the International Energy Outlook (IEO). This overview presents a brief description of the 

methodology and scope of each of the component modules of WEPS, along with a brief description of 

the modeling system. Further details on each of the component modules of WEPS are provided in 

individual model documentation sections.

The complete WEPS system contains three main parts:

• A common database to track historical energy data and WEPS projections

• Energy models that represent the various sector-level demand, transformation and supply 

projection activities. 

• A convergence model that determines when the system has reached an equilibrium between 

supply and demand.

WEPS is a modular system, comprising a number of separate energy models joined through a common 

database, which enables them to communicate and work with each other. EIA develops each of these 

models independently and incorporates well-defined guidelines or protocols for system communication 

and interactivity. The overall WEPS system uses an iterative solution technique that works toward 

converging consumption and price in an equilibrium solution.

The core WEPS models make up a complete set of models that can simulate the international energy 

system, along with a greenhouse gas emissions and policy model. The system also includes models that 

perform preprocessing and post-processing, including various final reporting programs.

The core set of WEPS models, in order of execution, is as follows:

• Global Activity Model

• Residential Demand Model

• Commercial Demand Model

• Industrial Demand Model

• Transportation Demand Model

• Electricity Model

• District Heat Model

• Hydrocarbon Supply Model

• Coal Supply Model

• Greenhouse Gas Model

• Convergence Model

Each model is run independently but reads and writes to a common database to communicate with 

other models. The common database provides seed values for macroeconomic quantities, energy prices, 

and energy consumption. The system runs each model in turn before running the convergence model, 
U.S. Energy Information Administration | World Energy Projection System: Overview 3

which determines if the system has converged. If the system has not converged, it begins another 

sequence (iteration). If it has converged, it finishes with report writing.

WEPS models 16 world regions that consist of countries and country groupings within the broad divide 

of the Organization of Economic Cooperation and Development (OECD) and non-OECD:

• OECD regions: United States, Canada, Other OECD Americas (Mexico, Chile, Colombia), OECD 

Europe, Japan, South Korea, Australia and New Zealand

• Non-OECD regions: Russia, Other non-OECD Europe and Eurasia (non-Russia), China, India, Other 

non-OECD Asia (non-China, non-India), Middle East, Africa, Brazil, Other non-OECD Americas 

(non-Brazil)

Individual models can use more detailed regions for internal calculations.

Historical Data

We use several key historical data sources for WEPS:

• EIA’s International Energy Statistics (IES) database 

(https://www.eia.gov/international/data/world) provides country-level data for the following 

fuels consumed for electricity generation:

o Liquids

o Natural gas

o Coal

o Nuclear energy

o Hydroelectric and other renewables

IES also includes data on electricity generation and installed generating capacity for

• Thermal

• Nuclear

• Hydroelectric

• Other renewables: wind; biomass and waste; geothermal; solar, tide, wave, and fuel cells

• The international data produced and maintained by the International Energy Agency in Paris 

(referred to as IEA/Paris), as part of its energy balances database, provides country-level 

consumption data for a wide variety of flows (sectors and users) and for a wide variety of 

products (detailed petroleum products, coal types, renewable sources, etc.). EIA uses these 

detailed data to derive the historical, end-use sector data used in WEPS demand models.

• Historical data and projections for the United States are extracted from the most recent EIA 

Annual Energy Outlook.

The EIA data source provides the overall consumption levels, and the IEA/Paris data provides 

consumption information at more detailed levels. The IEA/Paris data, therefore, must be calibrated (or 

shared) to agree with the EIA data.
U.S. Energy Information Administration | World Energy Projection System: Overview 4

Global Activity Model

The commercially available Oxford Economics Global Economic Model (GEM) and Global Industry Model

(GIM) generate projections of gross domestic product (GDP) and gross output for the various WEPS 

regions and their respective industrial sectors, given energy inputs from WEPS. The theoretical structure 

of GEM differentiates between the short-term and long-term projections for each country, with 

extensive coverage of the links among different economies. GEM produces GDP outputs for WEPS and 

provides drivers for GIM. GIM calculates gross output in various industrial sectors for each WEPS region,

based on input-output relationships.

Residential Demand Model

The WEPS Residential Demand Model projects household energy consumption. The Transportation 

Demand Model, however, projects on-road transportation energy demand, such as demand for motor 

gasoline. 

The Residential Demand Model primarily uses a dynamic econometric equation for the key energy 

sources, basing the projection on household income, residential retail energy prices, and an assumed 

future trend. The dynamic equation uses a lagged dependent variable to imperfectly represent fuel 

stock accumulation in the calculation of fuel prices for each region over time. Income and price 

projections are available from the Global Activity Model and supply models via the common database. 

The trend factor is meant to represent continuing impacts on energy use not directly represented in 

household income and prices and may include the effects of a variety of behavioral, structural, and 

policy-induced activities.

Commercial Demand Model

The WEPS Commercial Demand Model projects energy consumption that takes place in commercial 

buildings and activities. It also includes municipal activity, such as street lighting.

The Commercial Demand Model primarily uses a dynamic econometric equation for the key energy 

sources, basing the projection on service sector gross output, prices, and an assumed future trend. The 

dynamic equation uses a lagged dependent variable to imperfectly represent fuel stock accumulation in 

the calculation of fuel prices for each region over time. Service sector gross output and price projections 

are available from the Global Activity Model and supply models via the common database. The trend 

factor is meant to represent continuing impacts on energy use not directly represented in service sector 

gross output and prices and may include the effects of a variety of behavioral, structural, and policyinduced activities.

Industrial Demand Model

The WEPS Industrial Demand Model (also known as the the World Industrial Model, or WIM) projects 

the amount of energy that is directly consumed as a fuel or as a feedstock by industrial processes and 

activities. This includes both energy intensive and non-energy intensive manufacturing industries, and 

non-manufacturing industries. 
U.S. Energy Information Administration | World Energy Projection System: Overview 5

The WIM uses an array of seven energy intensity (EI) models to find the best fit for each region-industry 

based on historic trends, statistical measures, and analyst judgement. There are three ordinary least 

squares (OLS) and three least absolute difference (LAD) models, each type featuring a logarithmic 

growth, exponential decay, and ‘flat’ model where LAD models revert to the historic median and OLS 

models return to historic mean. The seventh model assumes exponential decay in all cases and is linked 

to the last historical year.

All seven EI models use historic energy intensity data to estimate coefficients which they then apply to

compute projections for the projection period. An algorithm then ranks the EI model results using 

several statistical indicators, the main indicator being the Akaike Information Criterion corrected for 

small samples (AICc). The top ranked EI model result is selected, unless an analyst has overridden the EI 

model selection algorithm. The energy consumption for each region-industry is calculated as the gross 

output multiplied by the projected EI. The energy consumption in each fuel category is calculated as the 

total consumption in a region-industry multiplied by the fuel shares.

Transportation Demand Model

The WEPS Transportation Demand Model projects the amount of energy consumed to provide 

passenger and freight transportation services. This projection includes personal household on-road 

transportation in light duty vehicles (counted here rather than in the Residential Demand Model), fuel 

consumed by natural gas pipelines, and small amounts of lubricants and waxes. The model projects

transportation consumption for 14 energy sources in each of the WEPS regions over the projection 

horizon. The Transportation Demand Model provides an accounting framework that considers energy 

service demand and service intensity (efficiency) for the overall stock of vehicles. The service demand is 

a measure of overall passenger miles for passenger services and overall ton miles for freight services. 

The service intensity is a measure of passenger miles per unit of energy expended (in Btu) for passenger 

services and ton miles per unit of energy expended (in Btu) for freight services.

The Transportation Demand Model performs the following functions:

• Uses a bottom-up approach to estimate demand for transportation energy by mode (road, rail, 

air, and marine) and vehicle type (light-duty vehicles, freight trucks, passenger rail, etc.)

• Estimates transportation energy consumption by fuel and region

• Estimates vehicle stocks by vehicle type and region

The Transportation Demand Model reads macroeconomic (GDP and population) and energy price 

projections from the common database. After running, the model provides transportation energy 

consumption projections to the common database.

Electricity Model

The WEPS Electricity Model (IEMM) projects the following:

• Electricity generating capacity additions and retirements

• Electricity generation

• Electricity added to and removed from storage 
U.S. Energy Information Administration | World Energy Projection System: Overview 6

• Electricity sold and purchased

• Electricity delivered to consumers

• Fuel consumed in electricity generation

• Carbon dioxide emissions

• Electricity prices

The module projects these quantities for each of the 16 WEPS regions by year and time-slice. A timeslice is a time period, specified by EIA analysts, as a period of the day during a particular month or 

season (e.g., January from 6:00 a.m. to 7:00 a.m.). In some cases, some of the quantities listed above are 

also broken out by other characteristics such as the type of technology used to generate the electricity. 

The module projects these quantities by minimizing an objective function subject to several constraints. 

The objective function represents the total cost for electricity suppliers to meet all electricity demands, 

by year and time slice, projected by the WEPS demand modules. Examples of constraints include limits 

on fuel-specific electricity generating equipment, policy constraints (e.g., renewable portfolio 

standards), and emissions caps. The IEMM uses linear programming to perform the constrained 

optimization.

District Heat Model

The WEPS District Heat Model projects the generation of district heat (steam or hot water, from an 

outside source, used as an energy source in a building) to satisfy the demands projected by the 

Residential Demand Model, Commercial Demand Model, and Industrial Demand Model for each region. 

For each fuel, the model estimates the amount of heat generated and the amount consumed, as well as

the end-use price of heat for each of the three demand sectors. In addition, the model projects fuel 

consumed and heat generated in each of the WEPS regions over the projection horizon for eight energy 

sources. The model uses prices from the supply models for distillate, residual, natural gas, and coal.

The District Heat Model uses a stock/flow approach in which it adds new heat generation capability each 

year as necessary, based on the heat generation requirement from the end-use demand sectors. The 

model takes into account the amount of heat that is available from combined heat and power (CHP) 

plants in the electricity generation sector.

Hydrocarbon Supply Model

The WEPS Global Hydrocarbon Supply Model (GHySMo) comprises three semi-independent submodules: 

logistics, upstream (oil and natural gas production), and conversion (petroleum refining).

The logistics model solves a transshipment network problem (based on a linear program that minimizes 

the costs) and determines the best way to direct supplies of various commodities (including natural gas) 

between a set of producing regions (nodes in the network) on transportation-mode specific routes (arcs 

on the network) to meet regional demands. Logistical assets included in the model are transportation 

modes (ships and pipelines) and nodal infrastructure (natural gas liquefaction and regasification 

facilities). Assets are designated by the commodity type (e.g., crude oil, natural gas, and petroleum 

products) that they carry or process. (Ships are further categorized by capacity size). The model projects 

commodity supply and demand prices and passes them to the upstream and conversion models.
U.S. Energy Information Administration | World Energy Projection System: Overview 7

The upstream model uses the projected commodity supply prices from the logistics model to solve a 

least-cost optimization problem: it projects when an oil/natural gas production project is economically 

viable, through its net present value. It also projects its production profile and the date of its 

commencement. 

The conversion model uses the crude oil demand prices to project (using a linear program(LP)) the 

optimal quantity of refined petroleum product that refineries should produce. Subject to constraints, 

the LP of maximizes the profit of the refineries.

The updated quantities from the upstream and conversion models are sent back to the logistics model,

and the entire process iterates until the convergence criteria have been met. The GHySMo sends the 

converged prices to WEPS for the demand models’ use in developing their own demand projections. 

Coal Supply Model

The WEPS Coal Supply Model (International Coal Markets Model, or ICMM) includes three sub-modules 

that determine the production, import, export, and price of coal:

• Data processor

• Production module

• Logistics module

Each component is connected to the others to process data from external input files, create and shift

coal supply curves, and project the coal trade between each pair of regions. 

The data processor starts the ICMM run by creating the input files necessary to run the production 

module and the logistics module. This includes, for example,

• Separating coal demand data into the four (or more) coal types defined by EIA analysts

• Creating regions, defined in the ICMM, to generate transportation rates based on data about 

trade routes

At the end of each run, the data processor creates the ICMM outputs for the common WEPS database

and for a model-specific diagnostic tool. 

The production module creates coal supply curves that the logistics module uses to project the price per 

unit of coal. Through an interative process, the production module and the logistics module compare 

and adjust coal supply curve parameters. This process (called the supply shift) allows the modules to 

simulate regional decisions, based on the previous year’s projections, to increase or decrease their 

production in the current projection year. The frequency of the adjustments are used as a convergence 

criteria: convergence is considered met if the supply shift does not change the coal production projected 

by the logistics module. 

The logistics module projects the quantities of coal shipped from supply regions to demand regions. It 

uses an LP that maximizes profit. It also projects the prices of different coal commodities (metallurgical, 

bituminous, subbituminous, and lignite) in the demand regions, the quantities shipped on each trade 
U.S. Energy Information Administration | World Energy Projection System: Overview 8

route, and coal production quantities. The profit maximization LP determines the trade routes with the 

lowest transportation rates and the supply regions with the lowest supply prices, to meet demand at the 

lowest possible delivered price. The logistics module passes the projected coal production quantities to 

the production module, which uses them to create new supply curves for the next iteration. 

Greenhouse Gases Model

The WEPS Greenhouse Gases Model projects energy-related carbon dioxide emissions by taking all of 

the consumption projections of the other models and applying carbon dioxide emissions factors to 

them. The emissions factors are calibrated to recent historical data from EIA’s International Energy 

Statistics database. The model does not count emissions from fuel used as a feedstock, or sequestered, 

or consumed in a carbon capture and storage technology. The model does not address carbon dioxide

emissions from non-energy consumption sources, nor does it account for non-carbon dioxide

greenhouse gas emissions.

Convergence Model

The WEPS Convergence Model evaluates and facilitates finding an equilibrium where energy production 

matches energy consumption. After the other WEPS models have run, the WEPS convergence model 

checks whether supply and demand are in equilibrium. If not, then other models are executed again, 

using prices and quantities from the preceding iteration. As needed, the WEPS convergence model 

adjusts prices up or down to help find an equilibrium.