Inside the Black Box - Exploring the Assumptions within Nuclear Power Forecasts

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Energy policy is critical to the evolution of electricity supply systems. The energy policy objectives of different countries usually include meeting the needs of households and contributing to the competitiveness of industry in a secure and environmentally responsible manner, with varying levels of emphasis placed on each element. Energy scenarios, projections and forecasts (hereafter all referred to as ‘scenarios’) are important tools for policy-makers wishing to understand the options for designing future energy systems and the consequences of these options in terms of costs, energy security and environmental impact. In the absence of such scenarios, policy-making is severely handicapped in attempting to gauge the possible impacts of specific measures.

A considerable number of energy scenarios, of varying degrees of quality, have been published by a range of organisations over the years. Energy systems are characterised by complex interactions between their constituent parts and attempts to understand the consequences of different policy options often make use of integrated quantitative economic models that aim to mimic the workings of these complex and interacting energy systems.

This report aims to review some of the best-known recent energy scenario studies using integrated models. It aims to map the variation between studies and to seek to account for it. The report examines the different assumptions that the studies make about the way the energy system works in order to identify the drivers for common tendencies and divergences amongst these studies. The intention is to inform better the public debate about energy policy in general and in particular to highlight optimal approaches for reconciling energy demand growth with ambitions for greenhouse gas emission reduction. The report concludes with some recommendations to future energy scenario builders.