An optical element, a lighting system, and a LED luminaire simulate natural sunlight for a space, such as an indoor room. The optical element is disposed in front of a tunable white light source and includes unique microstructures, which when used with the tunable white light source, produces an appearance of the sun. The lighting system comprises the optical element, the tunable white light source assembling the sun and a color tunable light emitting panel assembling a sky. The luminaire incudes the lighting system, a driver, and a controlling device for simulating sunny sky scenes throughout the day.