Modelling energy technology diffusion. Energy policy implications

Technological development is a very important issue in long-term energy demand projections and in environmental analyses. Different assumptions on technological development and diffusion of new technologies cart have substantial impacts on long-term energy demand projections. This paper examines policies that are designed to increase energy efficiency in a context of technological vintage models that describe technology diffusion. Especially the diffusion of technology as a consequence of introducing standards is examined. Diffusion of energy technologies can be seen from a very detailed perspective of a specific technology or equipment. On the other hand this derailed description of improvement could be aggregated to art energy-economic description of the development of energy efficiency. A number of Danish energy supply and energy demand models are used to illustrate the consequences of the vintage modelling approach. Far example, the diffusion of electric appliances is linked to economic activity and saturation levels for each appliance. An important issue for comparing energy demand projections from models based on different approaches to technological progress is the difference of policy effects among the approaches. In some models long-term energy demand can only be affected by exogenous price changes or taxes. In other models a range of policy instruments can influence the efficiency developments, rn the vintage model for electric appliances used in here taxes also have an impact on the intensity of use for some of the appliances, but the effect is limited. The vintage model due to its detail includes a number of policy instruments, which is examined in this paper.