A stochastic generalized Nash-Cournot model for the northwestern European natural gas markets: The S-GaMMES model
Ibrahim Abada and
Working Papers from Chaire Economie du climat
This article presents a stochastic dynamic Generalized Nash-Cournot model to describe the evolution of the natural gas markets. The major gas chain players are depicted including: producers, consumers, storage, and pipeline operators, as well as intermediate local traders. Our economic structure description takes into account market power and the demand representation captures the possible fuel substitution that can be made between oil, coal, and natural gas in the overall fossil energy consumption. The demand is made random because of the oil price fluctuations and we take into account long-term contracts in an endogenous way. The model is applied to represent the European natural gas market and to forecast, until 2035, after a calibration process, patterns of consumption, prices, production, and long-term contract prices and volumes. In terms of policy implications, we show how the perception of the oil price’s uncertainty modifies the gas long-term contract volumes in Europe between the producers and the midstreamers. Finally, we define the value, gain and loss of the stochastic solution adapted to our model and calculate them for each market actor.
Keywords: Energy markets modeling; Game theory; Generalized Nash-Cournot equilibria; Quasi-Variational Inequality; Equilibrium problems; Stochastic programming (search for similar items in EconPapers)
JEL-codes: C61 C73 D24 D43 L13 Q41 (search for similar items in EconPapers)
Pages: 44 pages
New Economics Papers: this item is included in nep-com, nep-ene, nep-for and nep-ore
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Persistent link: https://EconPapers.repec.org/RePEc:cec:wpaper:1308
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