Fuel costs

When modelling fuel costs in Times, I understand, one could use IRE_PRICE to input the cost of importing the fuel. In a case like this one, all processes that consume NG pay the same price for it .

If different processes pay different prices, for example, in the case of natural gas for OCGT and CCGT, is it correct to use FLO_COST instead of IRE_PRICE?

In both cases, if I want to know, for example, the short run marginal cost of producing electricity for a specific process using a natural gas combined cycle, I need to add VAR_ACT.M from the electricity process and  VAR_FLO-IN.M, is this correct?.



Yes, IRE_PRICE is meant to be used for defining the import price, for fuels for example.

If different consumers (processes) pay a different price (due to distribution costs, consumer-dependent fuel taxes or subsidies, or for whatever reason), you can model these differences by using FLO_COST, FLO_DELIV, FLO_TAX and FLO_SUB.

The marginal costs from the TIMES solution represent, in general, long-run marginal costs, i.e. the impact of the capital and fixed costs of the marginal producer are included in the shadow prices. But for timesliced commodities the impacts of the capital and fixed costs are normally visible only in the peak timeslice. The marginal costs in the non-peak timelices can thus be assumed to represent short-run marginal costs. To derive the short-run marginal costs in the peak timeslice as well, one would have to exclude the impact of the capital and fixed costs.

For any marginal producer, VAR_ACT.M and  VAR_FLO-IN.M would be zero, because these variables would then not be at their bounds but would be in the basis.
Thank you, Antti

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