Secondary energy price

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Label: Secondary energy price
Short description: Secondary energy price
Description: The secondary energy price of each energy carrier at the end-use level (coal, oil, gas, bio-energy, electricity, hydrogen) is calculated based on (1) the primary energy price, (2) energy taxes and subsidies, (3) the costs of energy conversion throughout the energy supply chain and (4) a correction factor.
Variable type: model (from/to model)

Variable is output of model component:

Variable is input of model component(s):

  • Click on a box to open the model component.

The primary energy price is calculated endogenously, based on depletion, technology learning and a second calibration factor to correct for price influences other than production costs, such as periods of geopolitical instability. These primary energy prices are calibrated to historically observed primary energy prices.

Energy taxes and subsidies are added explicitly at both the primary and end-use level and come from IEA data sources.

The cost of energy conversion is determined in the subsequent energy conversion modules. One of these modules is the electricity power generation module that add the costs of building power plants, electricity transmission or energy losses. Other conversion modules are the hydrogen and bio-energy module.

The correction factor is used to calibrate the endogenously calculated secondary prices to observed (historical) fuel prices.