Strategic planning and decision making, nonetheless making energy policies and strategies, is very extensive process and has to follow multiple and often contradictory objectives. During the preparation of the new Slovenian Energy Programme proposal, complete update of the technology and sector oriented bottom up model of Reference Energy and Environmental System of Slovenia (REES-SLO) has been done. During the redevelopment of the REES-SLO model trade-off between the simulation and optimisation approach has been done, favouring presentation of relations between controls and their effects rather than the elusive optimality of results which can be misleading for small energy systems. Scenario-based planning was integrated into the MESAP (Modular Energy System Analysis and Planning) environment, allowing integration of past, present and planned (calculated) data in a comprehensive overall system. Within the paper, the main technical, economic and environmental characteristics of the Slovenian energy system model REES-SLO are described. This paper presents a new approach in modelling relatively small energy systems which goes beyond investment in particular technologies or categories of technology and allows smooth transition to low carbon economy. Presented research work confirms that transition from environment unfriendly fossil fuelled economy to sustainable and climate friendly development requires a new approach, which must be based on excellent knowledge of alternative possibilities of development and especially awareness about new opportunities in exploitation of energy efficiency and renewable energy sources.