Introduction

The ‘hybrid’ modelling method can help bridge the traditional gap between top-down and bottom-up approaches for deriving low-carbon pathways. However, this involves considerable effort in building the reconciled national accounts and energy balance data. Moreover, the documentation on the required process for deriving ‘hybrid’ data has not been done yet. This chapter outlines the steps to be followed for constructing a hybrid input–output table (IOT).

The model-building capacity requires the construction of a hybrid dataset that will be further used for calibrating the model and generating future pathways. So this chapter outlines the first step of data hybridization in the modelling exercise. Accounting matrices constructed in the past were mostly aggregated in nature with hardly any energy system details.

However, this method does not take into account three factors (Figure 3.1). First is the heterogeneity in energy prices. Earlier, the databases considered one energy price for all the sectors, conveniently ignoring the fact that there are significant differences across sectors. For instance, the Indian government charges different electricity rates to households, agricultural consumers, and commercial firms. Similarly, natural gas prices vary depending on the consumer profile.

Second is the dual accounting of energy systems in monetary value and physical units. It is required to integrate the energy and technology information from technology-focused bottom-up models into the national accounts. Hybrid data involves separate matrices for energy prices, energy volumes, and economic expenses, so dual accounting is possible in energy–economy modelling.