Ramses

Linear optimization model
Ramses is a semi-linear optimization model that can calculate production, fuel consumption etc. on a very large number of plants on an hourly basis. Since the model is primarily intended for analyses of effects in Denmark, the Danish plants are currently described in more detail than the plants of other Nordic countries.

Electricity prices
The model also calculates the price of electricity, which creates balance in the market. In the electricity sector the Nordic countries are divided into 5 fields separated by transmission links with a maximum transmission capacity. If the transmission demand exceeds capacity, it is possible to get different electricity prices in the areas. The five areas are Finland, Sweden, Norway, West and East Denmark. At the district heating sector there are far more isolated areas, each with its own price.

Other inputs
Besides information about the transmission links, detailed information on plant type, efficiency and size, the model has the following input: fuel prices, prices of CO₂ emissions, fuel taxes, as well as electricity and water heating demand. Output from the model is production, fuel consumption, emissions of the individual plants and prices of electricity in each area.

Method for the Model
The model works in the way that all plants in each area are sorted by the short-term, marginal production cost of electricity. The works are to produce one by one – starting by the cheapest – and continues until the demand (including any need to export or import) of each operating hour is satisfied. Hence, the marginal cost of the most expensive plant determines the price of electricity in the area. Large hydropower is treated in a special way, because the water from the reservoirs can shift the timing of production from strategic considerations.

Investments in the model
The decision of investment in new plants are going on outside the model. There will only be invested if the calculations of the model show that the plant can earn the investment back, with assumptions about contribution rates for a given renewable energy (especially wind), free CO₂ emissions to fossil-based plants, etc. Plants located in an area with a need for district heating typically have a competitive advantage because of the revenue from heat sales.

Security of supply
Besides prices and quantities the model may provide an estimate of the overall supply of electricity. This is happening in light of stocastic input describing the probability of damage on plants or transmission links, time series on production from wind and hydropower and consumption variability.

Application of the model
Ramses is used for both scenarios and analyses. For example, it has been used for analyses on the impact of new transmission links, new wind farms, changes in consumption of electricity or changed prices on fuel and CO₂ emissions. For more information see: A very detailed and technical description of Ramses (in Danish).