The AD-MERGE model, developed at GERAD research team is an advanced integrated assessment framework that includes a diverse set of modules to evaluate the interplay between climate policy, technological innovation, and economic development. The model features a hybrid structure that combines bottom-up technology details with top-down economic perspectives. At its core, AD-MERGE integrates a macroeconomic module that accounts for economic growth and the distribution of income, an energy module that details technology-specific characteristics within the energy sector, and a climate module that simulates climate dynamics and impacts. These are connected through a damage module that assesses economic costs associated with climate change.

Incorporating endogenous technological learning, AD-MERGE dynamically represents how technological advancements and learning curves affect the cost and adoption of new technologies over time. The model is geographically disaggregated, allowing for the analysis of region-specific adaptation strategies and mitigation technologies. Interconnected modules of the model where the macroeconomic outputs feed into the energy module, which in turn informs the climate module, creating a feedback loop through the damage module that influences the macroeconomic decisions. This integration enables the evaluation of a full range of policy scenarios, from the adoption of novel energy technologies to the implementation of carbon pricing and regulatory measures.

The ETEM model provides a comprehensive framework for assessing energy transition pathways, focusing on various technologies and energy sources, including hydrogen and renewable energy mixes. It’s designed to analyze and suggest optimal combinations of technologies to meet energy demands efficiently and sustainably. The model is particularly useful for detailed, region-specific planning, offering insights into optimal capacity expansions and technology deployments that align with economic and environmental objectives. For the Baltic region, ETEM can deliver targeted analyses, supporting the development of effective energy policies and strategies. In the ETEM model, parameters for energy transition and economics, particularly for hydrogen and renewable energy mixes, can include the capacity factor of various energy technologies, investment costs, operational and maintenance costs, and emission coefficients. For example, when modeling hydrogen, parameters might cover production methods (electrolysis, steam methane reforming with CCUS), storage options, and usage sectors (transportation, industrial processes). For renewables, parameters could involve solar irradiation levels, wind speeds, turbine efficiency, and land availability, all crucial for determining the potential output and integration of these energies into the grid.