I’am of the thought that us the “developing world”, it’s high time we develop and be somewhere where we can safely say, “we have arrived”. Lack of access to reliable, clean, affordable energy is hampering our efforts to develop and compete on global platforms. The energy sector plays an important role in the economic sector of developing countries, basically it is a fundamental requirement and not much effort or should I say not enough effort has been placed so that we see it being made available to these countries improve their energy status. Energy commodities are an input into the production of goods and services. Energy is a final consumption good that provides cooking, transportation and other services hence I stress on the importance of energy. This sector contributes and influences the GDP and trade balances and the balance of payments and needs to be taken seriously. Hence I have always been on the side of advocating for the great interest of modeling energy demand, energy supply and energy-economy interactions.
Energy Modeling is defined by Jean-Guy Devezeaux as simply a set of equations that represents the real world. Usually both the data and theory underlying the model maybe imperfect, these models remain an important tool. They are used to plan and analyze the economic and energy impacts of policies and external events that have a direct or indirect influence to the modeled country.
Developing countries share a number of economic and energy characteristics that affect energy modeling. The economic traits I’am talking of includes:
- Population growth and low educational standards;
- High degrees of central planning;
- Constrained domestic markets;
- Weak currencies
- Constrained levels of capital and investment
- Narrowly specialized economic and production structures.
The energy characteristics they share include:
- Lack of understanding of the concepts of energy planning
- A non-commercial energy sector;
- Scarcity of long-term statistical data;
The use of a single model unfortunately does not apply in most instances because despite all the similarities, there are differences that separate these developing countries, viz (namely);
- Degree of openness of the economy;
- Geography size;
- Technical know-how;
In the next issue I will be talking about the various types of models that I believe can be used in developing countries.