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Since there exists a multi-level policy making system in the market economies, choices of decision makers at different levels should be considered explicitly in the formulation of sectoral plans and policies. To support the hypothesis, a theoretical energy planning approach is developed within the framework of the theory of economic policy planning, policy systems analysis and multi-level programming. The Parametric Programming Search Algorithm has been developed. On the basis of this theoretical model, an Australian Energy Policy System Optimisation Model (AEPSOM) has been developed and is used to formulate an Australian multi-level energy plan.

Inhaltsverzeichnis

Frontmatter

1. Introduction

Abstract
A long standing result from classical economics is geared to the establishment of the thesis that a market economy, through competitive equilibrium, ensures the most efficient allocation of resources1 (Debreu 1959) judged by the Pareto optimality criterion (Pareto 1971) that no one can be made better off without making some one worse off.
Sardar M. N. Islam

2. Multi-Level Optimisation

Abstract
Multi-level optimisation (MLO) is a useful technique for mathematical analysis. Recently, multi-level programming (MLP)1 has been developed as a mathematical programming technique for multi-level optimisation (Candler and Norton 1977). Although it is a powerful analytical technique for multi-level optimisation, experiments (mostly at academic levels) are continuing to develop the mathematical and economic theory of MLO and algorithms to solve an MLP. The objective of this chapter is to develop the theoretical foundations of an MLO model.
Sardar M. N. Islam

3. Multi-Level Programming

Abstract
It was stated in Chap. 2 that multi-level programming1 is a recently developed mathematical programming technique (Candler and Norton 1977) and that experiments are still going on to develop an algorithm to solve an MLP. In most of the existing MLP algorithms, some sort of transformation of the original problem is necessary. This makes the MLP solution relatively difficult, because the size of the transformed MLP becomes large in comparison with the original problem. Existing algorithms are usually not commercially available.
Sardar M. N. Islam

4. A Multi-Level Optimisation Approach to Multi-Level Energy Planning

Abstract
The objectives of this chapter are as follows: (1) to discuss the suitability of existing national sector-wide optimisation models for the formulation of an optimum multi-level energy plan; and (2) to develop an alternative approach which will, possibly, be free from the limitations of existing models.
Sardar M. N. Islam

5. A Multi-Level Optimisation Energy Planning Model for Australia

Abstract
From the discussion in the previous chapter it is now apparent that an energy model needs to be based on the foundations of the theory of economic policy, policy system analysis and on the methodology of MLP. The model should be developed within the general framework proposed in the last chapter. Therefore, the model will be a partial equilibrium energy sectoral microeconomic planning model, explicitly based on the MLO approach.
Sardar M. N. Islam

6. The Results of the Australian Energy Planning Model

Abstract
The numerical implementation of AEPSOM is supposed to provide information useful and adequate for the formulation of a multi-level energy plan. In this chapter, the AEPSOM results, which indicate the model’s capability in producing useful numerical output, will be reported and discussed. The chapter is structured as follows. How AEPSOM was solved, what type of output it produced, the policy uses of these results and the alternative AEPSOM solutions — these topics are reported in Section 6.2. A general discussion of all the relevant results produced by AEPSOM is provided in Section 6.3 while the sensitivity analysis is reported in Section 6.4. Validation tests on the results of AEPSOM are stated in Section 6.6 to determine the reliability of these results for policy prescription. This discussion of the validation of results will prepare the background for the use of these results in policy formulation in the next chapter.
Sardar M. N. Islam

7. An Australian Optimum Multi-Level Energy Plan

Abstract
Effects of the events in the international energy market have been considerable in Australia. Consequently, several energy policy problem areas have generated in the Australian economy. Some of these energy problem areas are: self-sufficiency in energy; appropriate pricing of energy; choice of a set of fiscal instruments; equitable distribution of the benefits created in the energy sector; conservation of energy; specially fossil fuels; finding measures appropriate for dealing with supply disturbances; optimum depletion of fossil fuels, and determination of the exact boundary of energy policies.
Sardar M. N. Islam

8. Major Findings: Summary, Areas for Further Research, and Conclusions

Abstract
To end this book on multi-level optimization which is based on Islam (1994), this chapter provides a summary and overview of the study, points out its limitations, suggests agenda for further research and draws some conclusions.
Sardar M. N. Islam

Backmatter

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