Overview of Linkage to Macroeconomic Module

ENERGY 2100 is able to be dynamically linked to a macroeconomic model to obtain a fully-integrated energy-environment-economy (E3) system. The model integration is performed using a controlling module which, for each year of simulation:  1) calls ENERGY 2020, 2) passes energy model results to the macroeconomic model, 3) executes the macroeconomic model, then 4) passes those results back to ENERGY 2100. This process is iterated up to five times each year until a set of convergence criteria is met. Model runs are able to be made stand-alone (non-integrated) or linked to the macroeconomic model (integrated).

Current Interface Linking to Canadian Macroeconomic Model

An interface currently exists which was written specifically to integrate ENERGY 2100 to Oxford Economics’ macroeconomic model (TOM) which is a version of Oxford Economics’ GEM model, customized for Environmental and Climate Change Canada. The TOM macroeconomic model simulates the economies of both Canada and the United States.


See specific topics for guidance on how to Specify Data Transfers and Mappings between the ENERGY 2100 and TOM. The sections below provide a broad overview of the typical transfers made between the models.

Data Transfers 

Transfers from ENERGY 2020 to Macroeconomic Model

The list below identifies variables that are typically sent from the energy model to a macroeconomic model during integrated runs.


  • Energy production by Fuel Type and Province/Territory (PJ per year) – Annual production of natural gas, oil, coal, and electricity.
  • Consumption of Energy by Fuel Type and Province/Territory (PJ per year) – Total annual crude oil, electricity, natural gas, coal, and refined petroleum products consumption.
  • Volume of Canadian Energy Exports by Fuel Type (PJ per year) – Annual exports of crude oil, electricity, natural gas, coal, and refined petroleum products from Canada.
  • Volume of Canadian Energy Imports by Fuel Type (PJ per year) – Annual imports of crude oil, electricity, natural gas, coal, and refined petroleum products to Canada.
  • Wholesale Canadian Energy Price by Fuel Type ($CN per GJ per year) – Annual prices for crude oil, natural gas, coal, and electricity at the point of production. This data can be considered similar to wellhead natural gas, WTI oil, and other wholesale energy market prices. Electric prices are a weighted average of the ENERGY 2020 nodal wholesale electric prices.
  • Delivered Canadian Energy Price by Fuel Type ($CN per GJ per year) – Annual prices for crude oil, natural gas, coal, and electricity at the point of consumption. Delivered prices include delivery charges and any sales, excise, and pollution taxes.
  • Device Investment by Economic Category (Billion $CN per year) – Annual total expenditure of each economic category on energy related devices. In ENERGY 2020, a device refers to machinery that is used to fulfill the production needs of the process for each given economic category. For example, a residential house requires space heating which can be met by installing a furnace or a factory might require steam which is produced via a boiler. In ENERGY 2020, both the furnace and boiler are devices, which are purchased, aged, retired, and replaced. 
  • Process Investment by Economic Category (Billion $CN per year) – Annual total expenditure of each economic category on process additions or improvements.  Process investments would include new buildings or facilities to meet growth in the economy or to replace aging existing stock. Investments also include spending in process improvements would be related towards decreasing the energy intensity of economic activity for each category. For example, investing in insulating a house would decrease the total heating and cooling process energy intensity since the home’s furnace and air conditioning would have to run less to regulate the temperature.  
  • Emission Permit Expenditures by Economic Category (Million $CN per year) – Annual purchases of emissions-related permits from a regulatory authority.

Data Transfers from Macroeconomic Model to ENERGY 2100

ENERGY 2100 uses macroeconomic data to drive energy demands in the residential, commercial, industrial, and transportation sectors.  Data from the macroeconomic model is used to initialize interactions in ENERGY 2100 during the historical period.  Currently, the model receives energy input data beginning in 1985 and requires corresponding historical macroeconomic data starting from that year.

 

The current linkages between ENERGY 2100 and the macroeconomic model allow for simulation of the real-time impact of energy and environmental concerns on the economy and vice versa. The list below identifies economic variables sent to ENERGY 2100 and how they are used.


  • Residential Housing Stock by Type and Province/Territory

ENERGY 2100 uses growth in housing stock as an indicator of growth in energy demand for the residential sector.  The change in housing stock contributes to the estimate of the rate of new construction, which is used in conjunction with marginal fuel choices, process efficiencies, and device efficiencies to determine energy usage.  The housing stock is broken out into single family, multi-family, and other family types.

  • Commercial and Residential Floorspace by Economic Sector and  Province/Territory

Within the commercial and residential sectors, ENERGY 2100 uses floor space by type of building as an indicator of energy demand.  The change in floor space contributes to the estimate of the rate of new construction, which is used in conjunction with marginal fuel choices, process efficiencies, and device efficiencies to determine energy usage.  The commercial floor space is specified for each commercial sector while residential floor space is specified by housing type. 

  • Real Gross Output by Industry by Province/Territory

Gross output by industry type and province is passed from the macroeconomic model to ENERGY 2100 and used to drive the growth in the industrial sector.  The change in industrial gross output contributes to the estimate of the rate of new factory construction, which is used in conjunction with marginal fuel choices, process efficiencies, and device efficiencies to determine energy usage.  Gross output is specified for each relevant industrial sector, as well as, mining, construction, forestry, and agriculture. 

  • Real GDP by Province/Territory 

ENERGY 2100 uses gross domestic product as a driver for energy demand within several transportation categories, such as freight and off-road.  Gross Domestic Product is used as a surrogate for increases in the demand for transportation by these sectors. 

  • GDP Deflator at the National Level

ENERGY 2100 uses the GDP deflator from the macroeconomic model as an indicator of the inflation rate.

  • Canada-US Exchange Rate

Within ENERGY 2100, all data are converted to US dollars and converted back to Canadian dollars on the output side.  ENERGY 2100 uses the Canada-US exchange rate from the macroeconomic model to do these conversions.

  • Population by Province/Territory

Population is used to calculate total households, the economic driver for passenger transportation energy demands, and is used to compute per capita outputs.

  • Personal Income by Province/Territory

ENERGY 2100 uses personal income as an indicator of demands within the air passenger industry.

  • Employment by Province/Territory

Employment is not used directly for the energy calculations in ENERGY 2100, but is used as an output and to generate energy use per employee ratios.