SAPIENT stands for Systems Analysis for Progress and Innovation in Energy Technologies.  The SAPIENT Project is a two-year project, from March 2000 through February 2002, funded by the European Commission.  Co-ordinators of this project are the E3M Lab of the Institute of Computers and Communication Systems (ICCS) of the National Technical University of Athens (NTUA), Greece.

Project Summary:

• Abstract
• Rationale
• Objectives
• Overview of Work
• Expected Results
• Innovative Aspects
• Contribution to EU Policies

Scientific/Technical Objectives And Innovation

Under the Co-ordination of the E3M Lab of the ICCS of NTUA, collaborators include:   

• E3M Lab of the Institute of Computers and Communication Systems (ICCS) of the National Technical University of Athens (NTUA)
• Centre National de la Recherche Scientifique, CNRS/IEPE
• Netherlands Energy Research Foundation, ECN               
• Katholieke Universiteit Leuven, KUL         
• Paul Scherrer Institut, PSI         
• University of Stuttgart, USTUTT/IER       
• International Institute for Applied Systems Analysis, IIASA

Abstract

The SAPIENT project addresses the general issue of energy systems analysis by considering key driving forces and policies that induce energy technology improvements and by evaluating the most relevant environmental, energy and economic implications. For this purpose, the project uses existing tools, namely the major European large-scale energy system models, and in particular their versions that incorporate endogenous energy technology evolution. Also the project aims at developing a model-integrating decision-oriented tool to evaluate R&D policy priorities under uncertainty. The systems analysis covers the European Union and the World, addresses the global warming policy issues in the presence of liberalised energy markets, and aims at constructing a complete energy scenario that will put forward the role of induced technology progress. The policy-related ambition of the SAPIENT project is to re-visit the energy-environment-technology systems analysis (for Europe and the World), so as to attempt to estimate the value of achieving accelerated technological progress in the fields of energy demand and supply and evaluate the policy instruments that could generate such progress.

Rationale

Technological change is widely recognised as a major driver of economic growth. In recent years there has been increased awareness that policy strategies targeting technological development are among the most effective means for reconciling economic growth with global environmental objectives. This implies that the assessment of future trajectories of energy systems is particularly meaningful for policy analysis when it takes into account context-specific (i.e. induced) technological progress.

Energy systems analysis and models have mostly neglected this causal relationship, overlooking that policy and economics have implications upon research, development and diffusion of new technologies. This omission arises first because of limited empirical understanding of the drivers of technological change and second because of inherent difficulties in the modelling of energy and economic systems with induced technological change. However, recent research in energy systems analysis, also supported by the Joule-III programme, provides evidence of a new empirical approach to this problem. The corresponding preliminary analysis shows that energy and environmental (in particular addressing global warming abatement) strategies have to be substantially re-considered when evaluated in the presence of an induced technology progress relationship.

Objectives

The objective of the SAPIENT project is to consolidate and further elaborate this recent advancement of research in energy systems analysis. The aim is to elaborate a full-scale assessment of energy technology strategy as a means of efficiently addressing the energy and environment policy objectives of Europe in a World context, incorporating that policy instruments and setting of objectives will drive (accelerate or obstruct) the energy technology progress. The policy-related ambition of the SAPIENT project is to re-visit the energy-environment-technology systems analysis (for Europe and the World), so as to attempt to measure the value of achieving accelerated technological progress in energy demand and supply and evaluate the policy instruments that could generate such progress. The project intends to provide quantitative indications of the consequences on the energy system and the benefits from such a strategy, which will combine policies on RTD with economic instruments and flexibility mechanisms. The benefits include enhanced cost-effectiveness of the policy setting and more complete measurement, since the effects through induced technological progress are incorporated. The general benefits that the project will evaluate, include energy system adaptation costs, economic activity, competitiveness of European industry, employment and of course the state of the environment.

Overview of Work

A key feature of the SAPIENT approach is the elaboration of a small aggregated model ISPA (Integrating System for Priority Assessment), which will explore the links between policies related to RTD and the benefits from technological progress. These benefits will be modelled through reduced-form relationships reproducing approximately the relevant behaviour of existing large-scale models for the European and World system and obtained by consecutive runs of these models. The large-scale models will also be used to evaluate the consequences of policy on energy demand and supply, the state of the environment and the economy. The role of the model will be to explore a domain of optimal R&D strategies in a context of uncertainty (i.e. incorporating notions of hedging) and in the presence of multiple objectives as is appropriate when considering public sector participation in R&D initiatives.

SAPIENT will also develop a compact but small integrated model, named ERIS/MERGE, which will incorporate the main mechanisms of ISPA into the optimal-growth (MERGE) and energy system optimisation (ERIS) structures. The aim is to concurrently use ERIS/MERGE for the policy analysis purposes of the project.

The large-scale models involved in SAPIENT will be connected to ISPA establishing a dialogue that will support the construction of a scenario. The models are complementary to each other, either because of their approach, or their regional coverage. Regarding the approach, POLES and PRIMES are market and behaviour-oriented and follow adaptive expectations to simulate the dynamics of the energy system. On the other hand , MARKAL, MESSAGE and ERIS are bottom-up optimisation models operating under perfect foresight. Also, PRIMES and MARKAL will cover Europe, while POLES, MESSAGE and ERIS are regionalized world models. Macro-economic general equilibrium model-based studies (mostly based on GEM-E3 model work developed under other projects) will complement the analysis by providing estimates of economy-wide benefits. Model versions enhanced by incorporating an induced technology progress mechanism will be used throughout the SAPIENT project.

In addition, the SAPIENT project will elaborate a complete energy demand and supply scenario for the world and the EU. Besides harmonising baseline scenario assumptions, the project aims at developing a scenario driven by environmental considerations addressing global warming strategic issues. The distinctive feature of this scenario development is the incorporation of induced technological progress reflecting the particular innovation driving forces inherent in the economic and policy context of each scenario. The model-based evaluations will include the effects from energy market liberalisation and the implications for technology choice.

The project plans to collect data to update existing databases on technology characteristics, historical learning data and R&D spending information. On this basis, causal relationships linking technology performance, learning and R&D policy will be estimated and used throughout the project work.

Expected Results

The project plans to deliver a rich set of quantified information and analysis regarding the system-wide aspects of key energy technologies and the interplay between energy and RTD policy, policy instruments, societal targets (e.g. global warming, competitiveness, etc.) and technological improvement. The project deliverables include analytical results on RTD priorities, portfolio allocation and innovation policy, energy and emission scenario developments (for the EU and the World), analytical and quantified results illustrating the mechanisms of induced technological progress. The analysis on the strategy for the post-Kyoto period in the presence of induced technological improvement will be a major contribution from SAPIENT.

Tangible results that are going to be widely diffused to the public domain include the updated energy technology and innovation database, the decision supporting tools ISPA and ERIS/MERGE, the report on RTD Priority Assessment and the Energy and Emissions Outlook. The latter will include an EU and World scenario and evaluations of impacts and instruments for global warming under liberalised energy markets.

Innovative Aspects

The research objectives of SAPIENT are innovative and challenging for energy modellers. The first aim is to consolidate and further develop the experimental ideas on endogenous technology dynamics in energy models. SAPIENT will advance the corresponding research forward through the elaboration of an integrating unifying model and through the operational application, for the first time, of the concepts and quantified mechanisms of induced technology progress in complete energy scenarios.

Contribution fo EU Policies

The SAPIENT project will address major policy issues of the European Union, including the strategy for global warming, the search for an environmentally compatible and competitive strategy for industry and the priority setting for technology-oriented policy in the energy domain. The project will provide European policy-makers with a rich set of information that will help shaping strategic choices. The new insights in this set of information come from the consideration of energy technology as a policy means that will help to reduce costs and maximise benefits in the process of adapting the European energy system to the actual needs of environmental and competitiveness policy.

The project involves major energy modelling teams operating in Europe. The aim is first to gain from exploiting economies of scale in the search of information and technical model work and second maximise the benefits from synergies to be obtained by the collaboration of the modelling teams. Regarding regional coverage, the teams fully cover the European Union and also provide an international world-level dimension.

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Last updated: 14 Mar 2006