IRE marginal prices
#1
Dear All,

I would like to clarify my understanding regarding the EQ_IreM attribute in Veda_BE. I know that it stands for an inter-regional-trade marginal price, which could be understood as the import/export price of a given commodity. But I would like to know which information/attributes Veda-Be uses to achieve these numbers, so I would be better able to interpret them


According to the DUAL solution TIMES doc – section 2.2.14, “Often, this value equals in absolute terms the commodity price (dual variable of commodity balance, section 2.2.7) of the commodity in the import region which would be how Ire balance is achieved in both sides of the transmission process.” Then, if I got it right, the doc also states that VAR_IRE (imp) should work in a manner that EQG_COMBALM + EQ_IREM = 0, which is other way of saying the same. However, in my model this barely happens. Besides, I think I should expect negative values for EQ_IreM (EXP) and positive values for EQ_IreM (IMP). Indeed, this happens most of time, but there are some timeslices in which both EXP and IMP values are negative. Is it denoting any issue in the model? If not, how should I interpret it?


Ultimately, in regards to the EQ_COMBALM (regional commodity balance/ shadow price), as far as I know it is ruled by technology’s LCOEs and the supply-demand balance for the given commodity. In the other hand, the EQE_COMPRD (commodity production) stands only for the production share. In Veda-BE the EQE_COMPRD is not available, would there be someway of getting this value from Veda_BE?


Thanks!
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#2
I think VEDA-BE only reads the EQ_IreM attribute from the *.vd file, containing the TIMES reporting parameters.
Usually there is an EQ_IRE equation for each direction of the trade, and so for bidirectional trade links there are two equations in each timeslice. TIMES reports the (undiscounted) marginals of the EQ_IRE equation as EQ_IreM(IMP/EXP) for the importing and exporting region, with the importing region getting the value with the opposite sign. So, in the bidirectional case there are two equation marginals reported for both regions, resulting in four EQ_IreM values reported.
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#3
Hi Antti,

once again, thank you for your instant response. 

Would you know which would be the variables or attributes considered in the EQ_IreM? I can't find it at any TIMES doc.

thanks,
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#4
Sorry, I don't quite understand your question.

There are no variables considered. The EQ_IreM values are taken from the marginals of the EQ_IRE equation. The solver gives these values. In the simplest case (no timeslice or commodity conversions, or IRE_FLO, is defined between the export / import region), there are neither any attributes considered.

Consequently, usually the only attribute affecting the EQ_IreM value is the efficiency, when that has been defined by IRE_FLO. The IRE_FLO efficiency affects the value simply as a multiplier on the export side, and so the reported value does not usually differ much from the raw EQ_IRE.M value.

Could you explain why you think there should be some variables or attributes considered?
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#5
Sorry, Antti, the question above should be “Would you know which would be the variables or attributes considered in the EQ_IRE?”

I understand that the EQ_IreM value comes from the dual solution as a result from the solver, which is the marginal cost of export/import a unit of a given commodity. Furthermore, it comes from a “constraint” in the LP model (EQ_IRE equation), which contains variables/attributes inputted by the user. For instance, in case of EQ_CombalM (also a marginal value for given commodity), the value is based on technologie's CAPEX, O&M, activity costs, fuel costs, economic rent, subsidies and others, as these attributes are what “would be needed” to produce one more unit of the commodity and somehow impact EQ_Combal.

In case of an IRE process, for the exporting region, maybe EQ_IreM (EXP) is equal to EQ_CombalM of the exporting region (same absolute value, but negative). But this is just a guess, which actually never happens, at least in my model.

For the importing region, maybe EQ_IreM (IMP) is EQ_CombalM (from the exporting region) plus an FLO_SUM “contribution” and some “supply-demand” dynamic, that would mean that a region which has already a high supply level or availability of a given commodity (at the timeslice level) would be “willing to pay” less for the commodity. So, EQ_IreM (IMP) would be very low (that is also what happens with EQ_CombalM, which decreases at times of high commodity availability).

Bu these are guesses and I can´t find these explanations at any TIMES/Veda document.
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#6
Ok, now it is clear:

Q: "Would you know which would be the variables or attributes considered in the EQ_IRE?"
A: Yes. EQ_IRE is quite well documented in the TIMES documentation. See Section 6.3.30.1 Equation EQ_IRE in Part II.
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