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The TheMA model covers European power markets and is used for a variety of purposes, including the preparation of our Market Outlooks, scenario analysis, investment evaluations, PPA analysis and more. A wide range of actors within the European power sector license the model for direct use. The model is continuously updated, maintained and improved in close collaboration with our clients.
The TheMA model in brief
The TheMA model can be used for both short- and long-term power market analysis. It matches supply and demand on an hourly basis, with prices determined by the marginal cost of the marginal generator (or equivalently, the willingness to pay of the marginal consumer). In doing so, the model accounts for start-up and ramping costs, as well as other intertemporal restrictions relevant to generation. The model has full, sequential hourly time resolution, and includes integrated coupling with the hydrogen sector (power-to-gas and gas-to-power). In fact, we were one of the first consultancies to integrate the modelling of the power and hydrogen sectors, thereby enabling the holistic modelling of sector coupling.
Thermal plants are modelled in detail to take into account start-up and shut-down costs, part-load efficiencies, minimum-load restrictions and more. The model also incorporates detailed hydropower modelling, based on implicit water values, the simulation of reservoirs, hourly plant availability and inflows, and minimum discharge/generation restrictions, etc.
Variable renewable generation like wind and solar power is modelled using historically observed hourly volatility. We have also developed a comprehensive weather database that allows the user to simulate future years with more than 40 different weather years. This allows the user to dive deep into weather-related risk factors and their impact on average prices, capture prices and revenues.
The model allows for a detailed representation of demand response and demand flexibility, new flexibility solutions, batteries and more. It can be run both in classical Net Transfer Capacity (NTC) mode or with Flow-Based Market Coupling (FBMC). Finally, TheMA has a module for endogenous investments to simulate investment in new capacity based on investment costs, prices and maximum potentials.
The model can be run via an intuitive Excel interface or via Python (using our Themathon Python library) and can be easily connected to additional databases or other sources. We provide several options for output handling, including a Graphical User Interface, a Python library and Excel tools. Data handling (both input and output) is extremely flexible and can easily be adjusted to meet your needs.
A fully transparent power market model
- Model subscribers benefit from close collaboration with THEMA covering support, model development and tailored adjustments. Overall, a model subscription typically includes:
- Access to the model: This includes a complete dataset for the European power sector covering the period to 2050 and the model code, which is updated semi-annually. The model is implemented in GAMS and uses commercial solvers (e.g. CPLEX).
- Full transparency: Users have full access to all the relevant data and to the source code itself. Nothing is hidden!
- Access to all of our output tools and our Themathon Python library.
- Membership in our modelling forum: All users meet annually through our modelling forum to share their experiences and agree on the model development programme.
- Support and close collaboration: Client interaction is very important to us and we place enormous emphasis on helping our clients to get the most out of the model and our services. We expect regular two-way communication with subscribers outside of the scheduled development meetings, allowing us to adapt the model’s development to better meet clients’ needs. And, of course, our service agreement also includes generous technical support.
An accessible power market analysis tool
There are a range of features that distinguish the TheMA model from potential competitors:
- We have a long track record in both developing and using models. Put simply, we know what we are doing. Since we are constantly using the model ourselves internally, model development is guided by the need for relevant results, sound methods, and finding a good balance between complexity and transparency/computation time.
- We help our clients both to use the model and to analyse and understand the results. A model is, by definition, a simplification of a complex world and a tool to support deeper understanding. We help our clients understand the model’s limitations and ensure that they get the relevant deeper insights provided by the modelling analysis.
- The model is both very easy to use and extremely versatile. It can be used for a variety of purposes and can be easily tailored for use in conducting specific analysis and examining specific projects.
- Benchmarking: As the model is in constant use by both our market analysis team and our clients, it is continuously benchmarked against the markets. We have conducted numerous back-testing exercises that validate the accuracy of the model and our methods.
- We help clients tailor the model to their specific needs.