If you’re looking for proof of the flexibility of the National Energy Modeling System (NEMS), you don’t have to look much further than our current lineup of clients—which includes government, non-profit, and corporate organizations—and the wide range of energy questions we help them answer. It’s clear that there are many different scenarios for which you can gain useful insights with a NEMS-based analysis.
When we talk to new clients or potential new clients, we are often asked, “Can the NEMS model be used to analyze X policy or Y technology?” The answer to this question is often a qualified “yes.” Due to the way the model is built and what it has been built for, there are some limitations to the questions the NEMS model can effectively answer. That’s not to say we can’t work around those limitations, but in many cases, doing so will add time and expense to a project.
The flipside, of course, is that there are many scenarios for which NEMS really “shines.” These are the uses it was built for and they require very little in the way of customization. Here we explore three model limitations and contrast them with examples of scenarios that are ideally suited to NEMS.
Three Limitations to the NEMS Model
1. Short-term forecasting
NEMS was built for long-range forecasting of the energy system. The model solves in annual increments to the year 2040. If you’re looking to know what will happen to gasoline prices next fall, or the impact of a power outage that lasts a few days, it’s not the best tool. But, if you’re interested in the energy system’s response to policies, trends, and other system changes over the next few years and decades, it’s one of the best tools available.
2. Small jurisdictions
NEMS works well for forecasting outcomes for U.S. states, groups of states, and at the national level. Each module of NEMS, including the demand, supply and conversion (e.g., electricity and refinery) sectors, reflects the regionality that best suits the data available and issues affecting that sector. NEMS cannot answer questions involving specific cities or towns, and only considers policies affecting other countries to the extent that they may impact energy prices or trade opportunities in the U.S. But regional or national level policies are ideal for analysis with NEMS.
3. Technologies with small market potential
Some of the energy questions we’re often asked to answer involve the long-term impact of certain technologies, such as a type of biofuel or a new alternative energy source. For most well-established technologies, this presents no difficulties; they are already built into the model. For newer technologies, we can often modify the model to address a client’s needs. However, the NEMS model may not be able to say anything significant about certain new technologies whose market niche is very small or technologies that are not expected to be widely available until after 2040.
Where the NEMS Model Shines
Here are a few examples of energy policies and technologies for which the model works well without much customization:
- National energy policies, such as CO2 or greenhouse gas reduction scenarios.
- The power sector. The model includes a high level of technology richness and economic detail in the power sector.
- Residential or commercial buildings sectors can be used to explore questions related to appliance or lighting standards, energy tax credits, and energy-saving technologies such as LED lighting
- The transportation sector, especially alternative fuel vehicles and policies promoting energy efficiency and greenhouse gas reduction.
- Oil and gas recovery. The NEMS model includes a rich level of detail about the plays and reservoirs that can be explored and/or developed, with timelines and production for each, down to small areas.
- Petroleum products and their substitutes. The model’s refinery model includes a range of biofuels as well as refinery processes that can address issues related to changes in crude types and demands
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