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Hi Gordhan,
The number of historical years that you use is up to you - it's not a question that I can answer for you. Whatever you feel is necessary to achieve a balance between good statistics and data availability.
Yes, you can model sectoral demand and electricity supply in LEAP. I would suggest that you look over our online training materials to get a better idea of LEAP's capabilities. Exercise Six focuses on least-cost optimization.
http://www.energycommunity.org/default.asp?action=42
Best,
Taylor