Modelling of uncertainties and price elastic demands in energy-environment planning for India

This paper describes two variants of the Indian MARKAL model: a long-term technology oriented optimisation model for energy-environment planning for India. The first variant uses stochastic programming to include future uncertainties in the analysis. Details of model formulation, results and sensitivity analysis are described here. The second variant uses an innovative approach to simulate price sensitive demands within a linear formulation. The analysis incorporating future uncertainties suggests that it is prudent to reduce carbon emission in anticipation of a global regime in future. Modelling with price elastic demands estimates up to 10% reduction in carbon emission due to reduced demands, under a severe carbon tax.