Abstract
The development of a complex and dynamic system such as the energy sector requires a comprehensive understanding of its constituent components and their interactions, and thus requires approaches that can adapt to the dynamic complexity in systems. Previous efforts mainly used reductionist approaches, which examine the components of the system in isolation, neglecting their interdependent nature. Such approaches reduce our ability to understand the system and/or mitigate undesirable outcomes. We adopt a system dynamics approach to construct an integrated model for analysing the behaviour of the energy sector. Although the Australian energy sector is used as a case study, the model can be applied in other context elsewhere around the world The results indicate that the current trajectory of the Australian energy sector is unsustainable and growth is not being controlled. Limits to growth are fast approaching due to excessive fossil fuel extraction, high emissions and high energy dependency. With the current growth, Australia’s global CO2 emissions footprint will increase to unprecedented levels reaching 12% by 2030 (9.5% for exports and 2.5% for domestic). Oil dependency will account for 43% and 47% of total consumption by 2030 and 2050. By 2032, coal will be the only fossil fuel resource available in Australia. Expansion of investment in coal and gas production is a large risk.
Highlights
The energy sector is an inherently dynamic and complex system, as it contains many components that have complex cause-effect relationships generated through multiple feedback loops
Energy resources extraction pipeline model is almost similar in all energy resources, but a stock of reserves is added to fossil fuel resources, representing energy reserves and extraction, and backup power cost is added to non-dispatchable resources
Our results indicate that the current trend of the Australian energy sector is likely to lead to high CO2 emissions, high energy dependency and unsustainable fossil fuel extraction
Summary
The energy sector is an inherently dynamic and complex system, as it contains many components that have complex cause-effect relationships generated through multiple feedback loops. The system consists of diverse supply sources, complex utilisation and the involvement of multiple stakeholders with different management objectives and interests It is influenced by various internal (e.g., demand fluctuations, energy policy developments and socio-economic-ecological systems) and external (e.g., political instability, natural disaster and energy dependency) factors. The combination of all these factors means that energy managers and planners have to make decisions under uncertain environments, and the development of the sector in a sustainable manner faces many challenges. These include growing energy demand, depletion of fossil fuels, threats of pollution from energy emissions and global warming. The high energy dependency, lack of energy efficiency development and uncertain policy towards the development of renewable energy (RE) are other key challenges [1]
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