Forecasting Energy Consumption Analysis and Simulation Tool (model part: industry)

The main purpose of the FORECAST Industry model is to calculate scenarios of industry transformation with the background of climate change mitigation. It covers the European Union, UK, Switzerland and Norway and is usually applied within the timeframe of European and national climate targets (up to 2050). Main calculations happen on national (NUTS0) level, with capabilities to disaggregate results downwards to NUTS3. The model includes all industrial subsectors (e.g. iron and steel, cement, pulp&paper…) relevant to Eurostat and national energy balances, adding details on individual processes (e.g. blast furnace operation) and technologies (e.g. heat pumps, hydrogen-based direct reduction).

FORECAST Industry is a bottom-up simulation model. Therefore, the model uses highly-disaggregated data ("bottom") on industrial processes (e.g. specific energy consumption of steel production) to explain observable high-level figures ("up", e.g. electricity use in industry). The main approach is thus the assumption that the sum of all individual industrial activities constitutes the entire industry sector. Simulation means that the model strives to reproduce important aspects of decision-making (e.g. investment in new technologies) close to the actual process – including inefficiencies, lack of information and imperfect decisions.

The bottom-up approach of FORECAST Industry is well suited for instrument-based analyses that investigate specific subsectors, energy carriers or technologies (e.g. EU-ETS, IPCEI, CCfDs, Ecodesign, circular economy actions). For example, it is used for ex-ante evaluation of the German policy mix as part of the documentation requirements of Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action. In addition to instrument-based analyses, FORECAST Industry is often applied to exploratory scenarios and in combination with other sectoral- and energy-system models.

The FORECAST model family also includes models for buildings and appliances.

FORECAST Industry is based on European or national energy balances (e.g. Eurostat, AGEB (Germany)). In addition, it uses techno-economic data from literature and production statistics to define properties of around 80 industrial processes (e.g. energy intensity, deployed and potential future technologies). The combination of these techno-economic data and scenario-based assumptions on industrial activity (physical production of specific products) yield energy demands per product, process and subsector. This energy demand can be influenced by energy efficiency, fuel switch (driven by fuel prices or regulations), technology replacement (e.g. electric boilers replacing natural gas-fired ones) or complete process switch (e.g. hydrogen-based direct reduction instead of blast furnace operations) – all of which may be impacted by policies included in the scenarios.

In this calculation process, additional information are added to the statistical data with which the model started – thus, the process is called "disaggregation of energy balances". The disaggregated description of the industry sector is used to calculate possible futures in scenarios. In a final step, the model results are aggregated back towards the level of energy balances and calibrated to a given base year. The results thus represent a structurally compatible extension of the base statistic into the future along the scenarios defined in the project, with the main output of final energy demand, energy carrier shares and GHG-emissions by source (compatible with National Inventory Reports (NIR)).

• Energy balance (Eurostat, national balances)
• Various techno-economic data on industrial processes (e.g. temperature profile of heat demand, energy intensity, investment and operation costs of technologies,…)
• GHG-emissions (National Inventory Reports, common reporting tables)
• Scenario definitions (including expected development of all input data)
• Policy instrument description
• Past and current activity of industrial processes (physical production)
• Energy carrier prices
• CO2-pricing
• Gross domestic product