Abstract

Energy systems analysis and policy interventions are the key tools for environmental damage mitigation, and sustainable production and use of energy. While policy decisions are based on energy systems models which provide insights into the current and potential future state of the systems, whether or not to invest in an energy system project is primarily determined by economic and environmental concerns. This chapter presents the methodologies applied in energy economics models, techniques of economic costing and environmental life cycle assessment (LCA). It highlights the challenges posed by the multidisciplinary nature of the methods that underpin energy systems models, and the limits on the completeness of the knowledge presented to policy makers due to the complexity and vastness of energy systems encompassing technology, environment and society. Current research and future directions for model development are also identified.