Energy Economics Group

Reducing the climate impact of industrial production is crucial for reaching a long term low-carbon society. The share of about 30 % of the total global final energy demand shows the importance of this sector for the global emissions. The main goal of this paper is to discuss a new modeling framework to be built up for analyzing industrial energy demand and the effects of energy policies on its future development. As technology-specific effects of energy efficiency and renewable energy policies should be investigated the model must provide a detailed representation of technologies. Furthermore policies to overcome barriers to energy efficiency and renewable energies have to be designed according to the characteristics of the respective barriers. These barriers occur in the decision making of energy related investments, therefore the new modeling framework should address this decision making process. A description of existing models that can address questions in this context and a characterization of the methodologies that should be used in the new modeling framework should open the discussion on strengths and limitations of possible approaches. 2 The result of this paper is the outlining of a new modeling framework concept and its strengths and limitations. I will conclude with possible next steps in the development and application of this modeling tool. Keywords: Industrial energy demand, modeling of investment decisions, energy efficiency and renewable energy policies, effects on technological developmen