Research Areas

Switzerland is confronted with a number of policy challenges related to the energy system. These include managing the phase out of nuclear energy, responding to the need for significant reductions in greenhouse gas (GHG) emissions and maintaining access to secure and affordable energy to support ongoing economic development. There exists significant uncertainty as to the most suitable options for achieving these goals, including uncertainty about the future performance and acceptability of different technologies options, future patterns of energy demand, infrastructure development, and international developments.
The Energy Economics group at PSI has been a leader in analyzing the future development of the Swiss energy system, using energy scenarios and energy systems modelling approaches. For instance, the group codeveloped the first technologically detailed model for Switzerland – Swiss MARKAL (Schulz et al. 2008; Weidmann et al. 2009; Schulz et al. 2007). More recently, the group is developing new TIMES energy system and electricity sector models for Switzerland (STEM and CROSSTEM – see below) representing a major step in accounting for the impact of temporal variability on energy system development, and the influence of external factors on Swiss energy system development and policy options.

The international community faces a different set of energy-related threats compared to Switzerland. Among the most pressing is the challenge of providing energy services to support economic and social development in today’s less-developed countries, while ameliorating the environmental effects of energy use (including climate change); improving the security of the energy supply; and promoting the necessary investment in energy infrastructure. Managing this in a sustainable way will require profound changes to the global energy system, including the development and deployment of new technologies. Exploring the potential role of such technological change is essential for understanding potential transition pathways and supporting policy development.
Historically, the Energy Economics group at PSI has made important contributions to the development of global energy-systems and integrated assessment tools—namely the Global Multi-regional MARKAL (GMM) model and the MERGE model—for analysing scenarios for the future development of global energy system, particularly in the context of analysing technological change and learning (Barreto and Kypreos 2002; Kypreos et al. 2000; Manne and Barreto 2004; Magne et al. 2010). These tools have been applied by PSI in various EU-sponsored projects (e.g., ADAM, SAPIENTIA, CASCADE-MINTS) and in industry collaborations (e.g., AGS Hydrogen, Volkswagen). Currently, the Energy Economics group pursues three main activities: 1) continuing development of modelling tools focussed on technological change in the energy sector; 2) maintaining expertise in integrated assessment modelling; and 3) expanding technology representation across modelling tools.

We use game-theoretic models to analyze the investment and production behavior on European electricity markets. Furthermore, we use multi-stage stochastic programming methods to optimize the dispatch of pumped-storage energy units against exogenous electricity prices.