REMIE3 with MARKALTIMES Example

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REMI-E3with MARKAL/TIMES Example

• Presented by George I. Treyz
• Regional Economic Models, Inc.
• Acknowledgements
• Gary Goldsteins (IRG) presentation to IEA-ETSAP
  Semi-Annual Workshop at St. Annes College in
  Oxford, U.K.

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Presentation Outline

• Short Description of REMI Economic and
  Demographic Forecasting and Simulation Model and
  Its Use
• Environmental and Energy Uses
• The REMI-E3-MARKAL/TIMES Product

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REMI Key Model Features

• Includes all inter-industry linkages
• Is based on Economic Theory
• Includes New Economic Geography Theory
• Is calibrated and estimated using data
• for the region(s) being modeled
• Is dynamic and predicts when the results will
  occur
• Is the leading Policy Analysis model in the U.S.

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Short Description of REMI

• The REMI model integrates key aspects of several
  economic modeling tools

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REMI Model Linkages
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REMI Model Linkages (Cont.)
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REMI Applications - Environment

• What will be the effect of proposed air pollution
  control regulations on the Los Angeles area?

• Policy Variables Used
• Cost of equipment
• Spending
• Non-pecuniary benefits of better health

• Key REMI Results
• Economic effects of costs, spending, and
  amenities
• Employment and measured real income per capita

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1. Environmental Rules Changes Inputs to REMI
Output
Maintenance Employment
Pollution Control Equipment Investment and
Construction
Population Labor Supply
Market Shares
Labor Capital Demand
Health Improvements Due to Reduced Air Pollution
(Amenity Change)
Wages, Costs Prices
Costs for Pollution ControlEquipment and
Maintenance
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REMI-E3 Main Issues Addressed

• Established the mapping of REMI economic output
  to MARKAL demands
• Identified what portion of the MARKAL outputs are
  the most effective inputs to REMI
• Determined mechanisms for conveying said MARKAL
  results to REMI (Policy variables)
• Established strategies to avoid or reduce
  double-counting by REMI (e.g. if MARKAL
  calculates investments in energy techs, REMI
  should not further modify these investments)
• Developed conceptual design of semi-automatic
  interfaces between the two models

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Linking MARKAL/TIMES to REMI for the Power Sector
Resources Activity
Changes in electricity consumption
Output

• Investment for
• Power Plants
• Pollution Control
• Demand-side actions
• (ee, dsm, fuel switching)

Consumer Electric Rates
Maintenance Employment
Population Labor Supply
Market Shares
Labor Capital Demand
Emissions
Wages, Costs Prices
Industrial Commercial Electric Cost Changes
Costs for Pollution ControlEquipment and
Maintenance
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MARKAL/TIMES Links to REMI Model Inputs
Output
Direct demand changes by industry for investment,
operation, changes in fuel use, and maintenance
from service industry
Direct consumption changes due to new
technologies (reallocation of total shifts)
Population Labor Supply
Market Shares
Labor Capital Demand
International imports and exports
Cost of fuel, operations, maintenance, and
investment (annualized) for purchasing industries
Wages, Costs Prices
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MARKAL Energy Perspective
Demand for Energy Service
End-Use Technologies
Conversion Technologies
Primary Energy Supply
(Primary Energy)
(Final Energy)
(Useful Energy)
Industry, e.g. -Process steam -Motive
power Services, e.g. -Cooling -Lighting Househol
ds, e.g. -Space heat -Refrigeration Agriculture,
e.g. -Water supply Transport, e.g. -Person-km
Industry, e.g. -Steam boilers -Machinery Services
, e.g. -Air conditioners -Light
bulbs Households, e.g. -Space heaters -Refrigerat
ors Agriculture, e.g. -Irrigation
pumps Transport, e.g. -Gasoline Car -Fuel Cell
Bus
Fuel processing Plants e.g. -Oil
refineries -Hydrogen prod. -Ethanol prod. Power
plants e.g. -Conventional Fossil Fueled
-Solar -Wind -Nuclear -CCGT -Fuel
Cells -Combined Heat and Power
Renewables e.g. -Biomass -Hydro Mining
e.g. -Crude oil -Natural gas -Coal Imports
e.g. -crude oil -oil products Exports
e.g. -oil products -coal Stock changes
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Model Characteristics (Cont.)

• Evaluates all options within context of entire
  energy / materials system by
• balancing all supply/demand requirements
• ensuring proper process/operation
• monitoring in detail each processs capital stock
  turnover
• adhering to user defined environmental policy
  restrictions.
• Computes an equilibrium on energy markets that
  takes into account impact of policies on
• energy and product prices
• technological development
• energy security (trade)
• attaining environmental goals
• consumer behavior (e.g., miles driven,
  warming/cooling homes)
• industrial output and profitability.

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Model Characteristics (Cont.)

• Provides framework for exploring and evaluating
  alternative futures, and role of various
  technologies, trade and policy options.
• Able to interact with other models used to assess
  regional issues, most notably dispersion and
  environmental impacts models, forestry/agriculture
  models and more detailed econometric models.
• Employs an open and well understood approach to
  both data assumptions and modeling technique.
• Facilitates stakeholder buy-in and participation
  by promoting communication between the various
  decision-making bodies.

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Producer/Consumer Equilibrium for each Commodity
w/ Technology Detail
Courtesy GianCarlo Tosato
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MARKAL/TIMES Results to REMI-PI - Details
MARKAL Model Run
VEDA BE Tables
M2R Reference Case Results file
INVEST.COST
AC.INVEST
REMI-Energy M2R
M2R Mapping Sheet
M2R Scenario Results file
AC.FuelExp
AC.OM
REMI Policy Variables and Other Inputs
AC.RESOURCE L.RESOURCE
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MARKAL/TIMES-2-REMI Workbook Technology
Grouping Table
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MARKAL/TIMES-2-REMI Workbook Scenario Results
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An Example of The REMI Results in a multi-area
U.S model using Only Exogenous Cost Changes
Price changes in energy that is directly
purchased by the consumer (i.e. gas and fuel oil)
Output
Population Labor Supply
Market Shares
Labor Capital Demand
Wages, Costs Prices
Cost increases in natural gas, electricity, and
residual fuel
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REMI-E3with MARKAL/TIMES
1. Start
3. Economic inputs required by MARKAL/TIMES for
Control Forecast
REMI Model 169
REMI-E3 R-to-M Model
MARKAL/ TIMES
2. REMI Control Forecast
9. REMI Alternative Forecast
10. Economic Effects of New Policy
4. MARKAL/TIMES Control Forecast
REMI-E3 M-to-R Model
8. REMI Policy Variable Changes
7. MARKAL/TIMES Difference
REMI Model 169
6. MARKAL/TIMES Alternative Forecast
5. New Policy Assumptions
MARKAL/ TIMES
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REMIs objective
Policy Application
Economic Theory