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Topic Title: DECC's Dynamic Dispatch Model and the mystery of the missing assumptions
Topic Summary: What is the range of CfD strike prices that DECC have used in their model?
Created On: 29 May 2013 02:58 PM
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 29 May 2013 02:58 PM
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Posts: 1059
Joined: 05 September 2004

Dynamic Dispatch Model (DDM) - May 2012

"The Dynamic Dispatch Model (DDM) is a comprehensive fully integrated power market model covering the GB power market."

As I have already pointed out DECC does not list the assumptions it has used for this model in its document

"DECC Dynamic Dispatch Model (DDM) Assumptions"

The Dynamic Dispatch Model (DDM) was written for DECC by Lane Clark & Peacock LLP (LCP)

"In 2011, DECC commissioned the development of a Dynamic Dispatch Model (DDM) to model the the impact of policies on the GB market over the 40 next years. DECC asked for a stochastic model that could run 1000 simulations in under an hour."

In July 2011 the Dynamic Dispatch Model (DDM) was peer reviewed by Professors David Newbery and Daniel Ralph.

They list some of the inputs to the model then as

"Allow explicit assumptions to be input such as:
- fossil fuel prices,
- inflation,
- foreign exchange rates;
- demand assumptions;
- projected effects on the load duration curves due to policy and technological change
- CO2 prices;
- generation plant capex and non-fuel opex;
- plant efficiencies; plant availabilities;
- plant closures and new build plans;
- policy incentives (e.g. ROCs, LECs)."

But these are not the assumptions underlying the model (assumptions about how various input parameters interact) these are an incomplete list of input variables to the model.

It appears that after this peer review the model was changed:

"Following the successful delivery of the dynamic dispatch model, LCP were commissioned to develop the model to include more advanced and complex features. These included capacity mechanism modelling, interconnectors and CfDs. Our consultants worked with DECC to specify the model and determine what each policy option should look like. We have a collaborative relationship with DECC that produces the policy tools and analysis that they need."

At the moment I am trying to get from DECC the range of strike prices that they have used when modelling the effect of CfD's.

I would also like to know if the effect of addiing demand response, short timescale storage (up to 24 hours) or changes in energy efficiency were modelled as part of their analyses.

My interests are fairly irrational because I am just trying to make a point: probably better if this model is comprehensively peer reviewed by academic engineers as well as economists and business consultants.

James Arathoon

James Arathoon

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