World Energy Projection System Plus Model Documentation: Natural Gas Module
September 29, 2011
Introduction
Purpose of This Report
The Natural Gas Model of the World Energy Projection System Plus (WEPS+) is a computerbased energy supply modeling system that is primarily used to estimate the retail and wholesale price regional natural gas. This report describes the version of the Natural Gas Model that was used to produce the projections published in the International Energy Outlook 2011 (IEO2011). The Natural Gas Model is one of 13 components of the WEPS+ energy modeling system, but it can also be run as a separate, individual model. The WEPS+ is a modular system, consisting of a number of separate energy models that are joined together through the overall system model in order to communicate and work with each other. These models are each developed independently, but are designed with well-defined protocols for system communication and interactivity. The WEPS+ modeling system uses a common and shared database (the “restart” file) that allows all the models to communicate with each other when they are run in sequence over a number of iterations. The overall WEPS+ system uses an iterative solution technique that allows for convergence of consumption and price to a simultaneous equilibrium solution.
This report documents the objectives, analytical approach and development of the WEPS+ Natural Gas Model. It also catalogues and describes critical assumptions, computational methodology, parameter estimation techniques, and model source code. This document serves three purposes. First, it is a reference document providing a detailed description for model analysts, users, and the public. Second, it meets the legal requirement of the U.S. Energy Information Administration (EIA) to provide adequate documentation in support of its models (Public Law 93-275, section 57.b.1). Third, it facilitates continuity in model development by providing documentation from which energy analysts can undertake and analyze their own model enhancements, data updates, and parameter refinements for future projects.
Model Summary
The WEPS+ Natural Gas Model determines wholesale natural gas prices for each of the 16 regions annually through 2035. The wholesale prices are then used to calculate retail prices for each of the demand and transformation sectors, using fixed end use sector specific mark-ups. The retail prices are exported to the shared restart file for use in the WEPS+ demand and transformation models. The Natural Gas Model is a reduced-form model that is estimated from perturbations of demand in the separate, standalone International Natural Gas Model (INGM). This reduced-form model is a response-surface type of model that uses a base price at a base level of consumption, and then models changes to the base price resulting from changes in consumption levels. The resulting consumption projections from a WEPS+ system execution are provided to INGM through a standard interface file. In turn, INGM provides a base price and reduced-form model coefficients for the use of WEPS+, after which WEPS+ uses the Reduced Form Natural Gas (RFNG) Model in subsequent model runs. The INGM is used to derive the detailed projections of natural gas production, imports, exports, LNG, and other supply components that are published in the IEO2011.
Model Archival Citation
This documentation refers to the WEPS+ Natural Gas Model, as archived for the International Energy Outlook 2011 (IEO2011).
Model Contact
Brian Murphy
U.S. Energy Information Administration
Renewable Electricity Analysis Team
EI-81/Forrestal Building
United States Department of Energy
1000 Independence Avenue, SW
Washington, D.C. 20585
Telephone: (202) 586-1398
E-mail: Brian.Murphy@eia.gov