Energy systems face complicated, long-term challenges with a high degree of uncertainty. To explore these challenges and support decision-making, energy system models have become a key tool.
Fifteen years ago, Kannan Ramachandran had an idea. With seed funding from the Swiss Federal Office of Energy, the scientist in PSI-LEA's Energy Economics Group started working on a new energy-economic model for Switzerland. One of the criteria he wanted: hourly temporal resolution, "uncharted territory" at that time. Ramachandran faced hurdles including inadequate data and limited computing resources. There was lots of troubleshooting, as certain equations were being applied for the first time. And the timeline was tight: just two years for the first version.
Evangelos Panos, now the Energy Economics Group leader, was able to contribute his expertise in operational research as a freshly hired Post Doc in the group. Panos recalls the first time he learned about the project: “I saw the project timeline pinned to the wall of Kannan’s office. I asked what he was working on, and he replied, matter-of-factly, ‘I’m building a new energy system model for Switzerland—should be done in two years.’ I thought to myself, ‘How is that even possible?’ But he did it!”
A model for the Swiss energy transition
This year marks the 15-year anniversary of the Swiss TIMES Energy system Model, or STEM for short. Today, the model covers the entire Swiss energy landscape, from electricity and transport to buildings and industry. Developed by the Energy Economics Group at PSI, the model has grown into a state-of-the-art analytical tool for energy policy analysis in Switzerland and become a cornerstone of national energy research.
As each country’s energy system is different, each country requires its own model, reflecting the geographical and climatic conditions, the existing energy infrastructure, the structure of the economy, as well as national policies and social preferences. This also applies when it comes to the energy transition. One of the STEM model's primary applications these days is helping researchers, policymakers and stakeholders explore how Switzerland can transition to a carbon-free energy system. The model is being used to address questions related to the decarbonisation of electricity and transport, the integration of intermittent renewables, the efficient use of domestic biomass, and the strategic role of hydropower.
"The Paul Scherrer Institute (PSI) did pioneering work by developing the first comprehensive energy system model for Switzerland that represents all sectors in an integrated and coherent framework," says Nicole Mathys, then at the Swiss Federal Office of Energy, who supported the project through its initial rounds of funding. "At a time when no such tool existed, the Swiss TIMES Energy System Model (STEM) introduced a dynamic, technology-rich approach that made it possible to simulate long-term pathways for the Swiss energy transition in a consistent and data-driven way."
Through numerous studies and model intercomparison exercises, STEM has become a key asset for evaluating robust, cost-effective, and socially feasible energy pathways for Switzerland.
At a time when no such tool existed, the Swiss TIMES Energy System Model (STEM) introduced a dynamic, technology-rich approach that made it possible to simulate long-term pathways for the Swiss energy transition in a consistent and data-driven way.
Goes beyond traditional energy system models
The STEM model covers all relevant sectors, has a time horizon of 2010 through 2100, and includes hourly representation of electricity demand on weekdays and weekends in three seasons. Advanced features of STEM include endogenous load profiles, ancillary services markets, a sophisticated unit commitment algorithm, electricity transmission grid constraints, consumer segmentation for mobility choices and material flow tracking for process-related emissions, providing insights that go beyond traditional energy system models.
The model has also demonstrated interoperability with other analytical tools—such as Computable General Equilibrium models, market and agent-based models, and life-cycle assessments—allowing for richer, multi-perspective scenario development. Its extensive documentation and transparency further enhance its utility for researchers and policymakers alike.
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An essential tool for Swiss energy systems research
According to Anne-Kathrin Faust of the Swiss Federal Office of Energy, the value of the STEM model has grown significantly as the energy system has become more complex. When it comes to detailed and dynamic analysis, STEM has proven "essential," Faust says. She continues, "Extensions such as integration with EU-wide models for electricity, hydrogen, and CO₂ infrastructure, detailed industrial modelling, representation of consumer behavior and flexible demand, as well as coupling with macroeconomic policy and network models, have made STEM a unique tool for evidence-based energy policy analysis in Switzerland and beyond."
As of 2025, LEA’s Energy Economics Group—and the STEM model—are contributors to the Energy Perspectives 2060, informing the country’s long-term energy policy. In addition, the group and their model are central to multiple major national research initiatives. Several highlights are:
- In the SCENE project, STEM is being regionalised to reflect the diverse realities of Swiss cantons, helping translate national climate goals into practical, local action plans.
- In the SWEET CoSi project, the model is integrating insights from social sciences to better capture how people make energy-related decisions—working closely with psychologists and sociologists to understand the societal factors driving change.
- In SWEET SURE, advanced links with different modelling frameworks ranging from economic to sectoral and infrastructure models, including life cycle analysis, were developed to assess a resilient and sustainable transition to decarbonisation.
- SWEET ACHIEVE aims to deepen the capability of STEM to account for emissions mitigation measures in hard-to-abate sectors and their energy and economic implications.
The team has also built tools that extend beyond Switzerland to cover all of Europe, as well as support city-level analyses (such as in Basel). The STEM model has even inspired a full national model for New Zealand.
Extensions such as integration with EU-wide models for electricity, hydrogen, and CO₂ infrastructure, detailed industrial modeling, representation of consumer behavior and flexible demand, as well as coupling with macroeconomic policy and network models, have made STEM a unique tool for evidence-based energy policy analysis in Switzerland and beyond.
A collaborative effort
"Over the years the scope, depth and computational capacity of STEM have been continuously advanced to establish it as one of the leading technology-rich energy-economic models worldwide, says Stefan Hirschberg, who founded the Laboratory for Energy Systems Analysis twenty years ago and supported the building of the model in its early stages. “It has always been a collaborative effort,” adds Ramachandran.
The prior head of the Energy Economics Group, Tom Kober, reflects on the model, "Comparing it with other models attests to its being one of the richest energy systems models in its class, with consistent real-world technology and market data." Kober adds, "Developing and maintaining such a model is only possible with brilliant and dedicated modellers who I had the pleasure to lead for about eight years."
The model is also a core tool for students in the group. Over the past fifteen years, the model has supported six PhD theses (two of which are ongoing), three postdoc research fellows, two Master’s theses, and numerous journal articles, conference contributions, and technical reports. With each such research project, the model has been refined and expanded — and expertise has been passed on to the next generation of energy modellers. As the LEA Lab Head, Russell McKenna, puts it, "To our knowledge, STEM is the most comprehensive and detailed energy model of the Swiss energy system, and it has benefitted from a history of development by a large team in many research projects and PhDs. It is an indispensable tool with which to analyse the complex systemic questions arising in the context of the Swiss energy transition."
The STEM model has received funding from the Swiss Federal Office of Energy, Swissgrid, Innosuisse, Verband Schweizerischer Elektrizitätsunternehmen (VSE), and Swisseletric Research, as well as support from collaborators too multiple to mention.
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STEM is an indispensable tool with which to analyse the complex systemic questions arising in the context of the Swiss energy transition.
The next frontier in energy systems modelling
As Switzerland’s energy transition becomes more complex, the STEM model is evolving to support the next generation of policy decisions. The group is working on expanding the model to tackle some of the most pressing challenges of the net-zero transition, across regions and sectors. A new version will be able to account for non-CO₂ greenhouse gases, such as methane (CH₄) from agriculture and waste, and nitrous oxide (N₂O) from fertilizer use and industrial processes. It is also being used to assess the broader impacts of climate change and air pollution on health and the economy. The next frontier is to incorporate macroeconomic feedback, allowing the model to simulate how the energy transition interacts with the Swiss economy.
With these new capabilities, STEM is on track to become Switzerland’s first full integrated assessment model, just as it was the country’s first large-scale energy system model 15 years ago. These developments ensure that STEM continues to provide science-based, socially relevant insights for policymakers, industry, and the public.