IDEAS home Printed from https://ideas.repec.org/a/eee/juipol/v69y2021ics0957178720301569.html
   My bibliography  Save this article

A system dynamics model to analyze future electricity supply and demand in Iran under alternative pricing policies

Author

Listed:
  • Dehghan, Hamed
  • Amin-Naseri, Mohammad Reza
  • Nahavandi, Nasim

Abstract

Ensuring sustainable electricity supply is a key issue facing decision-makers. Due to its impact on system reliability, balancing supply and demand is essential. Electricity subsidy policies in many countries have led to high consumption and low power plant efficiency, and may cause an imbalance in the future. This research analyzes different electricity subsystems using system dynamics to investigate how and when low energy prices lead to an unstable situation. Simulation results using Iran's data show demand surpasses supply with a continuation of current trends. However, when the prices increase 90%, demand is met, and subsidy decreases by about 20%.

Suggested Citation

  • Dehghan, Hamed & Amin-Naseri, Mohammad Reza & Nahavandi, Nasim, 2021. "A system dynamics model to analyze future electricity supply and demand in Iran under alternative pricing policies," Utilities Policy, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:juipol:v:69:y:2021:i:c:s0957178720301569
    DOI: 10.1016/j.jup.2020.101165
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0957178720301569
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.jup.2020.101165?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hary, Nicolas & Rious, Vincent & Saguan, Marcelo, 2016. "The electricity generation adequacy problem: Assessing dynamic effects of capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 91(C), pages 113-127.
    2. Coady, David & Parry, Ian & Sears, Louis & Shang, Baoping, 2017. "How Large Are Global Fossil Fuel Subsidies?," World Development, Elsevier, vol. 91(C), pages 11-27.
    3. Morcillo, José D. & Franco, Carlos J. & Angulo, Fabiola, 2018. "Simulation of demand growth scenarios in the Colombian electricity market: An integration of system dynamics and dynamic systems," Applied Energy, Elsevier, vol. 216(C), pages 504-520.
    4. Ansari, Nastaran & Seifi, Abbas, 2013. "A system dynamics model for analyzing energy consumption and CO2 emission in Iranian cement industry under various production and export scenarios," Energy Policy, Elsevier, vol. 58(C), pages 75-89.
    5. Sterner, Thomas, 2007. "Fuel taxes: An important instrument for climate policy," Energy Policy, Elsevier, vol. 35(6), pages 3194-3202, June.
    6. Tang, Ou & Rehme, Jakob, 2017. "An investigation of renewable certificates policy in Swedish electricity industry using an integrated system dynamics model," International Journal of Production Economics, Elsevier, vol. 194(C), pages 200-213.
    7. Zarei, Javad & Amin-Naseri, Mohammad Reza, 2019. "An integrated optimization model for natural gas supply chain," Energy, Elsevier, vol. 185(C), pages 1114-1130.
    8. Pan, Lingying & Liu, Pei & Li, Zheng, 2017. "A system dynamic analysis of China’s oil supply chain: Over-capacity and energy security issues," Applied Energy, Elsevier, vol. 188(C), pages 508-520.
    9. Qudrat-Ullah, Hassan, 2013. "Understanding the dynamics of electricity generation capacity in Canada: A system dynamics approach," Energy, Elsevier, vol. 59(C), pages 285-294.
    10. Zapata, Sebastian & Castaneda, Monica & Franco, Carlos Jaime & Dyner, Isaac, 2019. "Clean and secure power supply: A system dynamics based appraisal," Energy Policy, Elsevier, vol. 131(C), pages 9-21.
    11. Qudrat-Ullah, Hassan, 2015. "Independent power (or pollution) producers? Electricity reforms and IPPs in Pakistan," Energy, Elsevier, vol. 83(C), pages 240-251.
    12. Olsina, Fernando & Garces, Francisco & Haubrich, H.-J., 2006. "Modeling long-term dynamics of electricity markets," Energy Policy, Elsevier, vol. 34(12), pages 1411-1433, August.
    13. Hasani, Masoud & Hosseini, Seyed Hamid, 2011. "Dynamic assessment of capacity investment in electricity market considering complementary capacity mechanisms," Energy, Elsevier, vol. 36(1), pages 277-293.
    14. Saysel, Ali Kerem & Hekimoğlu, Mustafa, 2013. "Exploring the options for carbon dioxide mitigation in Turkish electric power industry: System dynamics approach," Energy Policy, Elsevier, vol. 60(C), pages 675-686.
    15. Qudrat-Ullah, Hassan, 2014. "Green power in Ontario: A dynamic model-based analysis," Energy, Elsevier, vol. 77(C), pages 859-870.
    16. Hosseini, Seyed Hossein & Shakouri G., Hamed, 2016. "A study on the future of unconventional oil development under different oil price scenarios: A system dynamics approach," Energy Policy, Elsevier, vol. 91(C), pages 64-74.
    17. de Vries, Laurens & Heijnen, Petra, 2008. "The impact of electricity market design upon investment under uncertainty: The effectiveness of capacity mechanisms," Utilities Policy, Elsevier, vol. 16(3), pages 215-227, September.
    18. Kiani, Behdad & Ali Pourfakhraei, Mohammad, 2010. "A system dynamic model for production and consumption policy in Iran oil and gas sector," Energy Policy, Elsevier, vol. 38(12), pages 7764-7774, December.
    19. Qudrat-Ullah, Hassan & Seong, Baek Seo, 2010. "How to do structural validity of a system dynamics type simulation model: The case of an energy policy model," Energy Policy, Elsevier, vol. 38(5), pages 2216-2224, May.
    20. Hasani-Marzooni, Masoud & Hosseini, Seyed Hamid, 2013. "Dynamic analysis of various investment incentives and regional capacity assignment in Iranian electricity market," Energy Policy, Elsevier, vol. 56(C), pages 271-284.
    21. El-Shazly, Alaa, 2013. "Electricity demand analysis and forecasting: A panel cointegration approach," Energy Economics, Elsevier, vol. 40(C), pages 251-258.
    22. Akber, Muhammad Zeshan & Thaheem, Muhammad Jamaluddin & Arshad, Husnain, 2017. "Life cycle sustainability assessment of electricity generation in Pakistan: Policy regime for a sustainable energy mix," Energy Policy, Elsevier, vol. 111(C), pages 111-126.
    23. Assili, Mohsen & Javidi D.B., M. Hossein & Ghazi, Reza, 2008. "An improved mechanism for capacity payment based on system dynamics modeling for investment planning in competitive electricity environment," Energy Policy, Elsevier, vol. 36(10), pages 3703-3713, October.
    24. Ansari, Nastaran & Seifi, Abbas, 2012. "A system dynamics analysis of energy consumption and corrective policies in Iranian iron and steel industry," Energy, Elsevier, vol. 43(1), pages 334-343.
    25. Ochoa, Patricia & van Ackere, Ann, 2009. "Policy changes and the dynamics of capacity expansion in the Swiss electricity market," Energy Policy, Elsevier, vol. 37(5), pages 1983-1998, May.
    26. Ahmad, Salman & Mat Tahar, Razman & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Abdul Rahim, Ruzairi, 2016. "Application of system dynamics approach in electricity sector modelling: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 29-37.
    27. Wang, Yongli & Zhang, Fuli & Zhang, Yuanyuan & Wang, Xiaohai & Fan, Lisha & Song, Fuhao & Ma, Yuze & Wang, Shuo, 2019. "Chinese power-grid financial capacity based on transmission and distribution tariff policy: A system dynamics approach," Utilities Policy, Elsevier, vol. 60(C), pages 1-1.
    28. Zhu, Chaoping & Fan, Ruguo & Lin, Jinchai, 2020. "The impact of renewable portfolio standard on retail electricity market: A system dynamics model of tripartite evolutionary game," Energy Policy, Elsevier, vol. 136(C).
    29. repec:bla:devpol:v:25:y:2007:i:6:p:659-679 is not listed on IDEAS
    30. Chen, Wenying & Yin, Xiang & Ma, Ding, 2014. "A bottom-up analysis of China’s iron and steel industrial energy consumption and CO2 emissions," Applied Energy, Elsevier, vol. 136(C), pages 1174-1183.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Md Hasan Maruf & Sameya Afrin July & Mamun Rabbani & Shafrida Sahrani & Molla Shahadat Hossain Lipu & Mahidur R. Sarker & Ratil H. Ashique & Md. Shahrial Kabir & A. S. M. Shihavuddin, 2023. "Energy and Exergy-Based Efficiency, Sustainability and Economic Assessment towards Improved Energy Management of a Thermal Power Plant: A Case Study," Sustainability, MDPI, vol. 15(6), pages 1-16, March.
    2. Lei Wen & Anqi Wang, 2023. "System dynamics model of Beijing urban public transport carbon emissions based on carbon neutrality target," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(11), pages 12681-12706, November.
    3. Li, Jinghua & Luo, Yichen & Wei, Shanyang, 2022. "Long-term electricity consumption forecasting method based on system dynamics under the carbon-neutral target," Energy, Elsevier, vol. 244(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dehghan, Hamed & Amin-Naseri, Mohammad Reza, 2022. "A simulation-based optimization model to determine optimal electricity prices under various scenarios considering stakeholders’ objectives," Energy, Elsevier, vol. 238(PC).
    2. Rios-Festner, Daniel & Blanco, Gerardo & Olsina, Fernando, 2020. "Long-term assessment of power capacity incentives by modeling generation investment dynamics under irreversibility and uncertainty," Energy Policy, Elsevier, vol. 137(C).
    3. Ahmad, Salman & Mat Tahar, Razman & Muhammad-Sukki, Firdaus & Munir, Abu Bakar & Abdul Rahim, Ruzairi, 2016. "Application of system dynamics approach in electricity sector modelling: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 56(C), pages 29-37.
    4. Ibanez-Lopez, A.S. & Moratilla-Soria, B.Y., 2017. "An assessment of Spain's new alternative energy support framework and its long-term impact on wind power development and system costs through behavioral dynamic simulation," Energy, Elsevier, vol. 138(C), pages 629-646.
    5. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2018. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Working Paper Series in Production and Energy 27, Karlsruhe Institute of Technology (KIT), Institute for Industrial Production (IIP).
    6. Heidarizadeh, Mohammad & Ahmadian, Mohammad, 2019. "Capacity certificate mechanism: A step forward toward a market based generation capacity incentive," Energy, Elsevier, vol. 172(C), pages 45-56.
    7. Rios, Daniel & Blanco, Gerardo & Olsina, Fernando, 2019. "Integrating Real Options Analysis with long-term electricity market models," Energy Economics, Elsevier, vol. 80(C), pages 188-205.
    8. Ibanez-Lopez, A.S. & Martinez-Val, J.M. & Moratilla-Soria, B.Y., 2017. "A dynamic simulation model for assessing the overall impact of incentive policies on power system reliability, costs and environment," Energy Policy, Elsevier, vol. 102(C), pages 170-188.
    9. Qudrat-Ullah, Hassan, 2017. "How to enhance the future use of energy policy simulation models through ex post validation," Energy, Elsevier, vol. 120(C), pages 58-66.
    10. Bublitz, Andreas & Keles, Dogan & Zimmermann, Florian & Fraunholz, Christoph & Fichtner, Wolf, 2019. "A survey on electricity market design: Insights from theory and real-world implementations of capacity remuneration mechanisms," Energy Economics, Elsevier, vol. 80(C), pages 1059-1078.
    11. Qudrat-Ullah, Hassan, 2015. "Independent power (or pollution) producers? Electricity reforms and IPPs in Pakistan," Energy, Elsevier, vol. 83(C), pages 240-251.
    12. Armin Leopold, 2016. "Energy related system dynamic models: a literature review," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 24(1), pages 231-261, March.
    13. Hary, Nicolas & Rious, Vincent & Saguan, Marcelo, 2016. "The electricity generation adequacy problem: Assessing dynamic effects of capacity remuneration mechanisms," Energy Policy, Elsevier, vol. 91(C), pages 113-127.
    14. Qudrat-Ullah, Hassan, 2014. "Green power in Ontario: A dynamic model-based analysis," Energy, Elsevier, vol. 77(C), pages 859-870.
    15. Blumberga, Dagnija & Blumberga, Andra & Barisa, Aiga & Rosa, Marika & Lauka, Dace, 2016. "Modelling the Latvian power market to evaluate its environmental long-term performance," Applied Energy, Elsevier, vol. 162(C), pages 1593-1600.
    16. Petitet, Marie & Finon, Dominique & Janssen, Tanguy, 2017. "Capacity adequacy in power markets facing energy transition: A comparison of scarcity pricing and capacity mechanism," Energy Policy, Elsevier, vol. 103(C), pages 30-46.
    17. Pan, Lingying & Liu, Pei & Li, Zheng, 2017. "A system dynamic analysis of China’s oil supply chain: Over-capacity and energy security issues," Applied Energy, Elsevier, vol. 188(C), pages 508-520.
    18. Zapata, Sebastian & Castaneda, Monica & Herrera, Milton M. & Dyner, Isaac, 2023. "Investigating the concurrence of transmission grid expansion and the dissemination of renewables," Energy, Elsevier, vol. 276(C).
    19. José D. Morcillo & Fabiola Angulo & Carlos J. Franco, 2021. "Simulation and Analysis of Renewable and Nonrenewable Capacity Scenarios under Hybrid Modeling: A Case Study," Mathematics, MDPI, vol. 9(13), pages 1-26, July.
    20. Qudrat-Ullah, Hassan, 2022. "A review and analysis of renewable energy policies and CO2 emissions of Pakistan," Energy, Elsevier, vol. 238(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:juipol:v:69:y:2021:i:c:s0957178720301569. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.sciencedirect.com/journal/utilities-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.