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The National Energy Modeling System
As the model evolved over time, a number of special features were added to reflect regulatory policies or to ensure that certain end-use prices from the linear program were average or regulated prices, rather than strict marginal prices. Other features were added to ensure intertemporal consistency between the time periods of the model. These capabilities were incorporated in either the linear program that controlled the equilibrium and determined convergence.
As a modeling system, PIES/MEFS encompassed a host of satellite models--coal, oil, natural gas, synthetic fuels, refinery, electric utility, end-use demand, and macroeconomic. Each of these satellite models produced the necessary coefficients and objective function costs for the linear program and incorporated sector-specific features as required. Other models used the results of PIES/MEFS to perform macroeconomic and distributional analysis. This structure served to organize the data and allocate responsibilities for the modeling activities.
INTERMEDIATE FUTURE FORECASTING SYSTEM
The current EIA integrated modeling system is the Intermediate Future Forecasting System (IFFS), developed in 1982. IFFS partitions the energy system into fuel supply, conversion, and end-use demand sectors and then solves for a supply-demand equilibrium by successively and repeatedly invoking the modules that represent these sectors. The model solves annually, currently with a forecast horizon of 2010. The supply-demand equilibration is performed one year at a time, stepping forward to the next forecast year when the equilibrium for one year is complete. Fundamental assumptions for the modeling system are the assumptions for the world crude oil price and a baseline macroeconomic forecast.
The fuel supply modules of IFFS encompass all the activities necessary to produce, import, and transport the fuel to the end user, thus computing the domestic production and the regional end-use prices necessary to meet end-use demand. Each of the end-use demand modules compute the fuel requirements for the sector by region, based upon the regional end-use prices of all competing fuels, as well as other factors such as economic variables and technology characteristics. The electricity module, as a conversion module, simulates an input of fuel based on relative prices and technology characteristics as well as generates and prices electricity as an output.
Within IFFS, the primary interfaces between the modules are the regional end-use prices and demands for each fuel. Each fuel supply or end-use demand module is called in sequence and solves assuming all other variables in the energy markets are held constant. That is, the coal module solves for the production and end-use prices of coal, assuming a slate of demands for coal and assuming that all other sectors are fixed. Any module that uses the coal prices would then use these new prices to compute demand the next time the module is executed. As the model solves, the modules are called in sequence and percentage differences between iterations for all end-use, regional prices and demands are computed. When differences are within the user-specified tolerance, convergence is declared for that forecast year and the solution of the next forecast year begins.