Development of the GreenREFORM sub-model for the production and trade of electricity and heating is described below.
The energy sub-model describes the production and price formation of electricity and heating year by year and within a given year. To model intra-yearly variation, each year is divided into time-intervals, which can be adjusted and can, in principal, be split into hourly intervals. The sub-model is significantly inspired by existing models of electricity and heating markets, such as Balmorel and RAMSES, the latter of which is the electricity and heating system model created by the Danish Energy Agency.
The purpose of having a fully integrated energy model, which includes variation within a given year, is to help describe which investments are necessary to achieve an ambitious green transition of the energy sector and to describe the costs associated with specific renewable energy goals, both with respect to investment costs and the cost of price fluctuations as well as lower energy supply security.
The energy sub-model is currently one of the furthest developed GreenREFORM sub-models. A fully functional simulation model had already been developed in the research group before the model group was established in DREAM in October, 2019. The Danish Energy Agency has for this purpose provided data to the research group. The ambition is for the GreenREFORM energy sub-model, as much as possible, to use the data and expert judgements, which are also used by the Danish Energy Agency in RAMSES.
Status of development and integration of the energy sub-model is that is has been integrated with the current version of the general equilibrium model and an experiment has been performed, where the two models interact with each other.
This is a very important milestone for the project and it is, to the best of our knowledge, the first time a model system has been integrated in such a way. This achievement was made possible by a number of novel modelling techniques developed by the two PhD students, who were responsible for developing the energy sub-model.
The following paragraph will continue to be updated during development.
The energy sub-model is described and documented in the following paper.
Read the paper "Modelling the Energy Sector in GreenREFORM"
Integration with the General Equilibrium Model
The following paper describes the current strategy for integration of the energy sub-model with the general equilibrium model (work in progress).
Read the paper "Strategy for integrating the energy sector model and the CGE model in GreenREFORM"
The following paper describes the first baseline simulation of the energy sub-model using data from the Danish Energy Agency (forthcoming).