The energy model combines a growth process in production with a partial equilibrium process. The energy model automatically replaces the energy sector in the full economic model unless the user disconnects that linkage.
For energy, the partial equilibrium structures have distinct demand and supply sides, using price to seek a balance. As in the economic model, however, no effort is made to obtain a precise equilibrium in any time step. Instead stocks serve as a temporary buffer and the model again chases equilibrium over time.
Gross domestic product (GDP) from the economic model provides the basis for energy demand calculations. Energy demand elasticities tend, however, to be quite high. Thus the physical constraints on the supply side are terribly important in determining the dynamics of the energy model.
IFs distinguishes six energy production categories: oil, natural gas, coal, hydroelectric, nuclear, and other renewables. For each category both conventional and unconventional sources are considered, but these have only been fully implemented for oil. IFs computes only aggregated regional or national energy demands and prices, however, on the assumption of high levels of long-term substitutability across energy types and a highly integrated market. The model also conducts energy trade only in a single, combined energy category. Finally, at the moment, there is not a full connection between the energy model and access to electricity and electricity production (see the IFs Infrastructure Model Documentation for a description of the electricity aspects of IFs).
For more on the energy module, please click on the links below.