THEMA’s proprietary power market model, TheMA, is an advanced, fundamental power market model covering European markets. The model has been used for a variety of purposes including the preparation of price forecasts, scenario analysis and investment evaluations. A wide range of actors within the European power sector license the model for direct use and the model’s userbase includes public authorities, energy utilities, portfolio managers and funds. The model is constantly updated, maintained and improved in close collaboration with these licensees.
TheMA can be used for both short- and long-term power market analysis. The model matches supply and demand on an hourly basis, with the price determined by the marginal costs of the marginal generator (or equivalently, the willingness to pay of the marginal consumer). In doing so, it accounts for start-up and ramping costs, as well as other intertemporal restrictions relevant to generation costs. The model has full, sequential hourly time resolution.
The model includes detailed modelling of thermal plant and accounts, among other things, for start-up and shut-down costs, part-load efficiency and minimum-load restrictions. TheMA 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 is modelled using historically observed hourly volatility; and just like thermal and hydropower plants, large wind farms and PV installations can be individually modelled using their own production profiles and characteristics.
A stepwise linear demand function can be applied and demand can be split into different components for each country, each with its own consumption profile. End-use tariffs can also be modelled to estimate their effect on consumer (prosumer) behaviour. Batteries are modelled accounting for their losses, storage, charging and discharging characteristics.
Cross-zonal flows can either be optimised (based on the price spread) or be defined by the user (for example to reflect contract-based trade). Interconnector capacities can be set on an hourly basis and the model can be set up to simulate trade using either Net Transfer Capacities (NTCs) or Flow-Based Market Coupling (FBMC).
What you get
- User-friendly model: The TheMA power market model is implemented in GAMS and can, therefore, be run using commercial solvers like CPLEX or GUROBI. It also delivered with an Excel interface. The model can, therefore, be run with Excel, or with Python or R and, using these tools, the model can be easily linked to databases or other file formats. Overall, TheMA is exceptionally user-friendly and flexible. It can be easily customised to meet your individual needs, for example for use modelling and optimising one’s own generation assets, or by altering the model’s geographic coverage.
- Complete database: The model license comes with a complete database covering all major European markets for the period to 2050.
- Full access: Users are provided with full access to all the relevant data and to the source code itself. The model, the code and the data used are all transparently available – there’s no ‘black box’.
- Output management using Excel, GUI, Python or R: Users can easily import all the results into our standard output tool in Excel. To get a handle on the enormous quantity of data generated (for example, the hourly value of generation over several years and scenarios for all of the modelled power plants), we have also developed both an R-based Graphical User Interface (GUI) and standard libraries in Python and R, such that the users have the option to manage the results programmatically.
- Introductory workshop and ongoing support: We help customers get the model up and running and present both the model and how to use it in an introductory workshop. The license also includes several hours of ongoing support.
- Updates: The power market model is continually updated and developed based on customer requests. An updated version is delivered to clients annually.
- Model forum: All users meet annually at our modelling forum to share their experiences and agree on the future development programme.
- Benchmarking: The model’s results are continually benchmarked against both forward prices and historic actual prices.
In addition to the standard version of the TheMA model, we have developed a range of variants and modules covering different uses.
Investment and carbon market modules
Whereas capacity additions and decommissioning are exogenously given (i.e. set directly by the user) in the standard version of the model, in the investment module, capacity additions and decommissioning are simulated directly by the model based on the assumed long-run marginal cost of different technologies (covering both CAPEX and OPEX).
The carbon market module is an extension of the investment module that calculates the carbon (EU ETS) price on assumptions about the overall emissions cap, the Market Stability Reserve mechanism, and emissions and abatement costs for sectors other than power. Fuel switching, for example from coal to gas, and the transition from fossil-fuel to renewable generation technologies are handled endogenously by the model.
Balancing market module
The balancing market module simulates restrictions relevant to the market for reserves, co-optimising the reservation of capacity to supply the balancing market alongside the spot market solution. The module is used, among other things, to model the market for secondary reserves.
The grid module simulates production patterns and physical power flows in the meshed AC network at a nodal level. As a result, it can be used to identify grid bottlenecks within or across price zones (or countries). The model can also be used to estimate PTDFs (Power Transfer Distribution Factors), which then be used by the flow-based market coupling module.