Powering Europe - European Wind Energy Association
Powering Europe - European Wind Energy Association
Powering Europe - European Wind Energy Association
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annex<br />
marketpowermodelling<br />
Although based on the assumption of a perfectly competitive<br />
market, CLASSIC is also able to capture the<br />
effects of market dynamics. In a perfectly competitive<br />
market, producers bid in their marginal production<br />
costs. Under the assumption of market power, the producer<br />
bids in a price that is above its marginal costs.<br />
In CLASSIC, this can be captured by defining bid-markups,<br />
which can be defined both in relative (percentage<br />
of marginal costs) or absolute terms. In this context<br />
it should be noted that those bid-mark-ups are exogenous,<br />
that is, they are defined by the user. 25<br />
Investmentmodelling<br />
CLASSIC is well suited for long-term power market<br />
modelling. For such modelling, future investments in<br />
the generation park are crucial. Sometimes, investments<br />
are known in advance. In this case the user<br />
can specify the investments that will come on-line for<br />
each region and plant group.<br />
However, not all future investments are known. In this<br />
case, the model calculates the investment levels, that<br />
170<br />
is, the investments are an output from the model. For<br />
example, running the model for 20 years ahead, a typical<br />
output would be how many investments in, say,<br />
combined cycle gas turbines (CCGT), are coming online<br />
over the next 20 years. In order for the model<br />
to calculate the coming investments, the user specifies<br />
an investment potential for each country and plant<br />
group, and the investment costs.<br />
The model also calculates refurbishments of plants<br />
that are retiring. The retirements have to be specified<br />
by the user, as well as refurbishment costs.<br />
Scenariomodelling<br />
A flexible scenario structure is used to enable the<br />
specification of a “base” set of data and then multiple<br />
scenarios that may differ in only a small number<br />
of aspects from the base data. The base data and a<br />
scenario data set are combined to the model data,<br />
which is used for the simulations and the analysis.<br />
The base data set is residing in the main model, and<br />
each scenario has a corresponding data worksheet in<br />
which the altered data is stored.<br />
25 In a market power model, the bid-mark-ups would be endogenous, i.e. the model would calculate the level of bid-mark-ups based on<br />
market dynamics and other features like uncertainty.<br />
<strong>Powering</strong> <strong>Europe</strong>: wind energy and the electricity grid