Abstract. Recent studies show that shrubs are colonizing higher latitudes and altitudes in the Arctic. Shrubs affect the wind transport, accumulation and melt of snow, but there have been few sensitivity studies of how shrub expansion might affect snowmelt rates and timing. Here, a three-source energy balance model (3SOM), which calculates vertical and horizontal energy fluxes -thus allowing within-cell advection -between the atmosphere, snow, snow-free ground and vegetation, is introduced. The three-source structure was specifically adopted to investigate shrub-tundra processes associated with patchy snow cover that single-or two-source models fail to address. The ability of the model to simulate the snow regime of an upland tundra valley is evaluated; a blowing snow transport and sublimation model is used to simulate premelt snow distributions and 3SOM is used to simulate melt. Some success at simulating turbulent fluxes in point simulations and broad spatial pattern in distributed runs is shown even if the lack of advection between cells causes melt rates to be underestimated. The models are then used to investigate the sensitivity of the snow regime in the valley to varying shrub cover and topography. Results show that, for domain average shrub fractional cover ≤ 0.4, topography dominates the pre-and early melt energy budget but has little influence for higher shrub cover. The increase in domain average sensible heat fluxes and net radiation with increasing shrub cover is more marked without topography where shrubs introduce wind-induced spatial variability of snow and snow-free patches. As snowmelt evolves, differences in the energy budget between simulations with and without topography remain relatively constant and are independent of shrub cover. These results suggest that, to avoid overestimating the effect of shrub expansion on the energy budget of the Arctic, future large-scale investigations should consider wind redistribution of snow, shrub bending and emergence, and sub-grid topography as they affect the variability of snow cover.