Geopolitical risks in energy system models: hindcasting in 31 European countries

Abstract Geopolitics undoubtedly shapes energy transitions, but to date, it has been rarely incorporated into energy system models or integrated assessment models of climate change (IAMs). Here, we integrate five indices reflecting geopolitical risks into national electricity system models in 31 European countries and use hindcasting over the 1990–2019 period to evaluate these model implementations. Specifically, we model the possible effects of geopolitical risks by enforcing more renewable or domestic technologies, by changing discount rates to represent investment risk, or by modifying energy security requirements, such as increasing capacity margin or diversifying investments. Our hindcasting results show that implementing geopolitical risks into modeling in all these different ways makes no simultaneous improvement in all countries, but some specific model versions do produce more accurate outputs in most countries. The choice of geopolitical risk indices does not matter as much, but better hindcasting accuracy is achieved for larger countries because the model more accurately reflects their shift towards renewable sources above climate policy. Representing geopolitical considerations in energy system models, like modeling other societal factors, is thus worthwhile, but highly challenging due to the multifaceted nature of geopolitics, the varying response of individual countries to elevated risk, and the intertwined nature of geopolitics and other factors that shape transitions.