A dynamic simulation of low-carbon policy influences on endogenous electricity demand in an isolated island system

Abstract

This paper considers the dynamics of electricity demand in response to changes arising from low-carbon policies and socio-economic developments. As part of an investigation into the evolution of such systems on small economically-developed islands, endogenous electricity demand and associated policies are studied for the Azorean island of São Miguel. A comprehensive System Dynamics (SD) model covering the period 2005 − 2050 is presented which captures both historical behaviours and real-world influences on the endogenous demand dynamics of an island-based electricity system. The impact of tourism, energy efficiency and electric vehicles (EV) expansion allied with associated policy options, are critically evaluated by the SD model using a series of scenarios. The model shows that energy efficiency measures exhibit the most significant long-term impact on electricity demand, while in contrast, policies to increase tourism have a much less direct impact and EV expansion has thought-provoking impacts on the long-term demand, although this is not as influential as energy efficiency measures.