Report: UK TIMES-CGE soft-linking work – review of progress and next steps

This report presents the progress made in the UK TIMES/CGE soft-linking work developed so far. It explains in detail the methodology used in the soft-linking process and presents an example of a soft-linking application, implementing a residential energy efficiency scenario.
Both TIMES (energy system model) and CGE (economy-wide model) have been used widely in policy analysis. The rationale behind linking energy systems models with economic models is to include the feedback effects between energy cost and energy service demands. This coupling enables analysis of heterogeneous sectoral dynamics that energy systems models on their own can only approximate with elastic demand.
The objectives of the work developed are:
• To study the impact of energy efficiency improving policies from different modelling perspectives
• To understand the value added from linking different types of models in terms of insights to policy analysis
• To understand the benefits for each model from a methodological perspective and potential gains for each model from soft-links
• To support the Scottish Government in their own use of the models.

Note that the soft-linking exercise developed here is not a complete functioning soft-linking methodology, but an exploratory analysis of different soft-linking approaches and a first attempt in the implementation of a UK TIMES-CGE soft-linking scheme. Therefore, the methodology presented here could be seen as the basis for further developments and future work.