Modeling two countries in one database

[vsaini]

Dear All, 
I am trying to models of India and Nepal electricity system in one database for estimation of power trade between them using  Bi-Trade processes. I will be running the model by keeping both the countries as internal region.  I would be grateful if anyone can provide clarity on the following:

(1). What is the overall objective function when both the regions are running together. 



(2). In the joint model will the AnswerTimes have a single objective function of minimizing the overall system cost (treating both India and Nepal as one) or it will have two objective functions wherein it will minimize the overall system cost individually for Nepal and Individually for India.  We are trying to find the trade potential between the two countries through this exercise.



(3). Is it possible to find the cost/price fo trade between the two countries as for two internal regions cost/price will be decided/calculated by the model.


(4). How do we extract the shadow prices from a model run.

I am using AnswerTIMES for modelling.

Warm Regards
Vinay Saini

[Antti-L]

Please find my answers below:

(1) When both the regions are running together, the overall objective function is the total surplus of the consumers and producers, which is maximized summing up the surplus over the two regions together.

(2) The joint model will have a single objective function of maximizing the overall surplus of all consumers and producers in both India and Nepal.

(3) It is possible to find the cost/price of trade between the two countries, as the two internal regions, as the cost/price will be calculated by the model.

(4) The reporting attributes EQ_IRE-EXP.M and EQ_IRE-IMP.M in ANSWER, and the reporting attribute EQ_IreM in VEDA-BE contain the endogenous trade prices, as derived from the dual values of the trade equations EQ_IRE.

Note that because TIMES is a partial equilibrium model, the objective is maximizing the overall surplus of consumers and producers, and not minimizing the costs. However, in special cases it is indeed equivalent to minimizing the overall system cost.

[vsaini]

Dear Dr. Antti, Thank you for your reply and I am really grateful for your constant support.

[vsaini]

Dear Dr. Antti,

It will really helpful of you, if you could also provide more details on the below query:

1) When both the regions are running together, the overall objective function is the total surplus of the consumers and producers, which is maximized summing up the surplus over the two regions together. The joint model will have a single objective function of maximizing the overall surplus of all consumers and producers in both India and Nepal. How is the objective function represented in the form of an equation ? If this is documented please do send me the document or suggest from where it can be downloaded?

2) Does the same logic also applies when the TIMES model is run for a single country without trade? Implying that the objective function is a function of total surplus of the consumers and producers. So far I have been assuming that it is minimization of the energy system cost.

Warm Regards
Vinay Saini

[Antti-L]

See the main Documentation, Part I, page 11:

"TIMES, like most equilibrium models, assumes competitive markets for all commodities. The result is a supply-demand equilibrium that maximizes the net total surplus (i.e. the sum of producers’ and consumers’ surpluses) as will be fully discussed in chapters 3 and 6."

Yes, the same equilibrium properties apply to a TIMES model run for a single country without trade.

[vsaini]

Dear Dr. Antti.,

Thank you for your reply and support.

Warm Regards
Vinay Saini