MultiMod

The energy system and resource market model „MultiMod"

Project

The energy system and resource market model "MultiMod" is a large-scale representation of the supply and demand of fossil fuels and renewable energy sources. It captures endogenous substitution between fuels, infrastructure constraints and endogenous investment (e.g., pipeline capacity, power generation technologies), as well as market power by producers of fossil fuels in a unified framework.

"This model was developed within the BMBF-project RESOURCES, in collaboration with NTNU Trondheim.“

The mathematical framework of the MultiMod model is a dynamic Generalized Nash Equilibrium (GNE) derived from individual players' profit maximisation problems. The formulation is generic and flexible, so that the supply chain of any number of fossil and renewable fuels can be modelled. The framework includes seasonality and allows for a detailed infrastructure representation and a comprehensive transformation sector (power generation, refinery sector). Investment in infrastructure (transportation, seasonal storage, transformation) is determined endogenously in the model according to the respective player’s inter-temporal optimisation problem. Furthermore, substitution between different energy carriers on the final demand side is endogenous. Modelling co-production of fuels (e.g. crude oil and associated gas) is possible, as well as a flexible setup of transformation units (multiple inputs, multiple outputs). By formulating the model as an equilibrium problem derived from non-cooperative game theory, the model can incorporate Cournot market power by individual suppliers as well as distinct discount rates by various players concerning their investment.

The current framework is an open-loop perfect foresight model. A stochastic version of the model is under development at NTNU Trondheim. This will allow for consideration of uncertainty and distinct risk profiles for individual players along the supply chain, including investment by consumers in energy efficiency.

For the model description paper, a database representing the global energy system was compiled and used for scenario analysis (Huppmann & Egging, 2014). New datasets or variations on the initial data base are currently under development within specific research projects:
  • Focus on US domestic conventional crude and shale oil infrastructure (lead: Johns Hopkins University)
  • Focus on Chinese coal policies (lead: Tsinghua University)
  • Focus on the global crude oil market and refinery investment (lead: DIW Berlin)

The model is also currently used within the Energy Modeling Forum Round 31 (EMF31) on "North American Natural Gas and Energy Markets in Transition". (link: https://emf.stanford.edu/projects/emf-31-north-american-natural-gas-and-energy-markets-transition)

Mathematical and numerical implementation:
The model is formulated and solved as a Mixed Complementarity Problem (MCP) and implemented in GAMS, using MS Access and MS Excel for data processing and output reports. The code package includes a number of auxiliary routines and algorithms that greatly facilitate the compilation of the data set as well as calibration of the model.


Academic references

S. Yeh, H. Huntington, Y. Cai, D. Huppman, P. Bernstein, and S. Tuladhar.
North American natural gas and energy markets in transition: Insights from global models.
EMF31 study report, in review.

O. Oke, D. Huppmann, M. Marshall, R. Poulton, and S. Siddiqui.
Mitigating environmental and public-safety risks of United States crude-by-rail transport.
DIW Discussion Paper 1575, 2016 | PDF, 4.13 MB

F. Feijoo, D. Huppmann, L. Sakiyama, and S. Siddiqui.
North American natural gas model: Impact of cross-border trade with Mexico.
DIW Discussion Paper 1553, 2016 | PDF, 1.15 MB

L. Langer, D. Huppmann, and F. Holz.
Lifting the US crude oil export ban: A numerical partial-equilibrium analysis.
DIW Discussion Paper 1548, 2016 | PDF, 2.09 MB

Huppmann, D., Egging, R. (2014). Market Power, Fuel Substitution and Infrastructure: A Large-Scale Equilibrium Model of Global Energy Markets. DIW Berlin.  Diskussionspapier 1370 | PDF, 0.91 MB | PDF, 0.91 MB
Also published in Energy 75: 483-500, 2014. DOI: 10.1016/j.energy.2014.08.004

R. Egging, D. Huppmann, 2012. Investigating a CO2 tax and a nuclear phase out with a multi-fuel market equilibrium model, IEEE Conference Proceedings, Ninth International Conference on the European Energy Market (EEM), pp.1-8.
DOI: 10.1109/EEM.2012.6254690

Su, Z., Egging, R., Huppmann, D. & Tomasgard, A. 2015. A Multi-stage Multi-Horizon Stochastic Equilibrium Model of Multi-Fuel Energy Markets.
CenSES Working paper 2/2015

Yeh, S., Y. Cai, D. Huppman, P. Bernstein, S. Tuladhar and H. G. Huntington (2016). "North American natural gas and energy markets in transition: insights from global models." Energy Economics 60: 405-415.
DOI: http://dx.doi.org/10.1016/j.eneco.2016.08.021


Feijoo, F., D. Huppmann, L. Sakiyama and S. Siddiqui (2016). "North American natural gas model: Impact of cross-border trade with Mexico." Energy 112: 1084-1095.
DOI: http://dx.doi.org/10.1016/j.energy.2016.06.133


Langer, L., D. Huppmann and F. Holz (2016). "Lifting the US crude oil export ban: A numerical partial equilibrium analysis." Energy Policy 97: 258-266.
DOI: http://dx.doi.org/10.1016/j.enpol.2016.07.040


Partners

NTNU Trondheim, Norwegen NTNU 

Johns Hopkins University, Baltimore, USA Sauleh Siddiqui

Tsinghua University EEEI