Electricity Transition in MFMod: A Methodological Note with Applications

This article describes power sector modeling methodologies for the World Bank’s macrostructural (MS) model—MFMod. MS models generally do not model sectors, such as the power sector, in detail, limiting their capacity to represent deep system transformation (e.g., low-carbon energy transitions). The main constraints to adequate sector modeling are data availability and technological representation of the power system. Time-series data for specific production factors across sectors do not exist consistently for most countries in World Bank models. This article describes two distinct methods to overcome this constraint: (i) using a more granular representation of the production function and (ii) linking the MS model with the World Bank’s electricity planning models. These methods provide a more nuanced technical representation of deep transformations, enabling discussions on their macroeconomic consequences. The article provides results for Mauritania and South Africa. These methodologies serve as a blueprint for macroeconomic modeling of energy transitions in this class of models.