An Introduction to the Open Energy Outlook Model and Recent Applications
By Mike Blackhurst
Energy systems are complex, involving millions of interconnected technologies that extract, convert, store, and move energy from diverse sources to everyday uses. As a result, changes to one part of the energy system can have ripple effects elsewhere. Changes to domestic and international markets and policy further complicate energy systems by influencing energy supply, demand, prices, and equity.
Nevertheless, addressing climate change requires transforming our energy systems. How can we effectively plan these changes given the complexity inherent in energy systems? What technologies and policies decarbonize our energy systems? At what cost? How can we de-risk these decisions? What are the tradeoffs? Answering these questions requires state-of-the decision support resources and thoughtful analyses.
Our team uses a method called Tools for Energy Model Optimization and Analysis (Temoa) to study energy systems. Temoa identifies the least-cost way to build and operate an energy system. Consider the example of constructing a house. You calculate the energy needed for lighting, appliances, water heating, space conditioning, and any other plug-in devices. Then, you gather data on prices for various models and energy sources like natural gas, solar panels, battery storage, and electricity from your utility. Optimization could determine the combination of energy supply, storage, and end-use technologies that fulfills your requirements at the lowest cost. Keep in mind, you might decide on a specific technology, say a certain appliance, that is not the absolute cheapest. However, the least-cost set of options gives you valuable insights into making an informed decision.
Our model, the Open Energy Outlook (OEO), similarly uses Temoa to analyze the entire U.S. energy system. Drawing from a rich database describing thousands of energy-system assets, OEO identifies the least-cost portfolio of energy sources and technologies that meet our expected demands for energy from 2020 to 2050 for 9 regions in the U.S. OEO models interdependencies among technologies and different energy sources; seasonal, daily, and hourly fluctuations in supply and demand; the ramping up and down of thermoelectric power generators, and tracks the flow of greenhouse gasses from energy sources into potential sinks, such as biomass or negative emission technologies. A key distinguishing feature of Temoa is that it considers different end-use technologies in identifying least-cost energy provisions, whereas other energy system models specify end-use technologies as inputs. Of course, OEO also tracks and reports greenhouse gas emissions as well as select criteria air pollutants. For a more comprehensive list of OEO capabilities, refer to the documentation for Temoa.
Most importantly, Temoa and OEO are both open-source. The OEO team believes that transparency, accessibility, and replicability are essential to achieving our decarbonization goals. As opposed to proprietary models and data, open-source resources better democratize understanding of the challenges and opportunities and facilitate consensus-driven strategies. An academic review of 31 “mostly” open source models found Temoa to be amongst the best.
OEO proves especially valuable in examining the dynamic interplay between policy and energy systems. Consider this: OEO can replicate the impact of a monetary incentive, like a subsidy or tax break, by adjusting the assumed prices of relevant technologies. It could identify the least- cost routes to meet emission reduction targets or, conversely, to maximize emission reductions within a specified cost range. Additionally, OEO can assess the influence of technology learning rates on both the energy system and emissions. These examples highlight just a few of the diverse applications where OEO can provide valuable insights.
Over the last year, our team has been using OEO to estimate how the Inflation Reduction Act will reduce emissions (and how to achieve net zero), identify lots of net-zero emissions strategies that are near least cost, build emission mitigation curves, estimate how hydrogen policy will impact emissions, and identify reduction opportunities by state. We also published our first Open Energy Outlook in September 2022.
Of course, we would not have had these opportunities without contributions from our core team, collaborators, and sponsors. We like to thank the Sloan Foundation for their continued financial support. We’d also especially like to thank the many contributors to OEO and Temoa, especially our colleagues at the Scott Institute for Energy Innovation.