Track: Systems Dynamics

Abstract

Iran’s energy supply system is highly dependent on fossil fuels due to excessive cheap fuel consumption used in transportation and power generation, as well as the lack of fuel economy standards for the appropriate amount of consumption. In addition to the above, importing fuel derivatives such as gasoline makes fossil fuel usage a path-dependent process. Such increasing energy demand and energy intensity are serious threats to Iran’s energy security. Understanding the systematic structure of this dependency is, therefore, the main interest of this study. System dynamics approach was the base methodology and a stock and flow model of energy dependency has tested four different scenarios. Comparison of the results infers that there will be increasing energy dependence on fossil fuels. When considering an increasing energy supply scenario, the energy dependency index decreases and on the other side, the energy security weakens due to the excessive consumption of fossil fuels resources. However, if the energy supply increases through consumption of renewable energy resources, in the second scenario, the energy dependency index decreases while there are no significant changes in the energy security index. In the last scenario, the demand-side management and energy demand reduction gained attraction in order to reduce the energy dependency index. However, this policy should be accompanied by increasing the renewable energy capacities to be able to reduce the energy efficiency and increase the energy security.