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Moreover, this model is formulated more flexibly such that a sequence of less-than fullhorizon may be solved. This is illustrated in Figure 3, where each Balbase4 modelconsists of four years within the full horizon. The spacing between the years within aBalbase4 model is the same as in any other Balbase4 model, in the example twoconsecutive years (from years within the full horizon) are followed by a slip of one yearand the a slip of two years. The number of years and the slips between the years are userdefined. This way a quite flexible rolling horizon approach is available.Year 2011 2012 2013 2014 2016 2018 2020 2025 2030HorizonModel 1Model 2Model 3Figure 3: Approach Balbase4 sequentially solves Balbase4 models, each consisting of asubset of all years in the full horizon, with updating between solves.Thus, in particular Balbase4 may reproduce the approach of Balbase2 which wasillustrated in Figure 1.The investment and operations costs are basically taken into account as in modelBalbase2. The distinguishing feature is that costs for all the years within a model areincluded. Thus, for example for the second model in Figure 3 (years 2012, 2013, 2016and 2025) annual costs corresponding to that of model Balbase2 are included as followsdepending on the year of investment in that model, 2012: four times the annual costs plus the four years’ operation costs 2013: three times the annual costs plus the tree years’ operation costs 2016: two times the annual costs plus the two years’ operation costs 2025: one time the annual costs plus the year’s operation costsThe other side of the coin is that investments made in year 2012 will have the incomefrom four years of operations to balance the four years of annual costs, etc. forinvestments the other years. Overall, the objective function in the Balbase4 model is tomaximize social welfare over the years included in the model.4 Some observation on the two approachesHere some general observations with respect to calculation time and prices will bereported.4.1 Calculation timeUsually model Balbase4 is larger than Balbase2, because it includes several years. Onthe other hand model Balbase4 may be solved less times. In most application,supposedly, if model Balbase4 includes X times larger than model Balbase2, then modelBalbase2 will be solved approximately X times more often than model Balbase4.A common experience from solution of LP (Linear Programming) models is that thesolution time is approximately linear in the size of the problem. If this holds true alsohere, this would mean that total calculation time would be approximately the same formodels Balbase2 and Balbase4. If a constant overhead per solve (model generation,communication between GAMS and solver, output handling) is appreciable, this maytend to favor model Balbase4 in relation to calculation time.Only if the generated model is large compared to available computer memory and otherresources approach Balbase2 (or a sequence of small Balbase4 models in a rollinghorizon approach) therefore may be preferable to approach Balbase4 with respect tocomputation time.Risø International Energy Conference 2011 Proceedings Page 154