System dynamics is an approach to understanding the behaviour of complex systems over time. It deals with internal feedback loops and time delays that affect the behaviour of the entire system. What makes using system dynamics different from other approaches to studying complex systems is the use of feedback loops and stocks and flows. These elements help describe how even seemingly simple systems display baffling nonlinearity.Feedback refers to the situation of X affecting Y and Y in turn affecting X perhaps through a chain of causes and effects. One cannot study the link between X and Y and, independently, the link between Y and X and predict how the system will behave. Only the study of the whole system as a feedback system will lead to correct results.
The methodology used to create a system dynamics model is to (i) identify a problem, (ii) develop a dynamic hypothesis explaining the cause of the problem (iii) build a computer simulation model of the system (iv) test the model for validity (simulates the behavior seen in the real world) (v) Testing of the model for alternative policies that alleviate the problem, and (vi) Implementation and monitoring of the solution to the problem. Energy access (in the form of electricity and fuels) is pivotal to achieving the Millennium Development Goals and the South Africa government’s key national priorities (access to proper health care, the provision of adequate housing, job creation, and access to quality education for all South African), since most social and economic activities require the use of energy in various forms and quantities.
Energy, in its many useful forms, plays a critical role in the development process, both as a domestic necessity and also as a factor of production whose cost directly affects the price of other goods and services (NEPAD, 2001). System Dynamics (SD) models the bioenergy intervention (project, programme or policy) on key variables of the system that relate to economics, society, and the environment; thereby enabling forecasting and policy formulation.