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PRIMES(Price Induced Model of the Energy System) is a simulation model of the energy markets in the European Union. It simulates a market equilibrium for energy supply and demand in the Member States by finding the equilibrium prices for each energy source. PRIMES is highly disaggregated and technology rich. It thereby simulates in detail the technology choice in energy demand and production. The existing stock of equipment is explicitly considered and the influence of policy, market conditions and technology changes can be looked at. Energy and environmental costs are considered in the optimisation. Therefore many main policy instruments such as regulation by sector and by country, environmental taxation, permit markets and subsidies for abatement can be analysed.

The PRIMES model is mainly used in the field of energy and environmental policy. However, it has also applications relevant to industrial and transport policy due to the fact that on the demand side the industry and transport sectors are modelled comparatively detailed. The model is suited for a lot of standard questions concerning the supply and the demand side, such as security of supply, strategic aspects, structure of supply (technology choice) and related costs. Other interesting applications deal with the possibilities opened by technology change or the impact of policy seeking to induce technology change (investment plans, energy pricing policy, regulation, Europ. Networks, EU energy market integration, energy savings power generation, dependency- vulnerability for natural gas and oil). Many abatement technologies are modelled as well as atmospheric emissions (CO2, NOX, SO2, N2O, CH4, VOC, PM). Therefore influence of environmental policy as well as energy policy on atmospheric emissions can be simulated.

Issues of transport and industrial policy are touched via aspects such as security of energy supply or energy prices. To study the general issue of internalisation of externalities an accounting framework for these externalities has to be used (e. g. the results of ExternE or the RED database).[1]


Typical Model Applications:

- Full EUROSTAT Energy Balance sheets per country and per year.

  • Energy demand at this classification
  • Energy costs, producer and consumer prices
  • Power generation park, load curves, load factors, investment and marginal costs
  • Refining units, expansion
  • Natural gas transport and distribution: flows, capacities, costs
  • Endogenous treatment of energy savings and new technologies
  • Atmospheric emissions (CO2, NOX, SO2, N2O, CH4, VOC, PM)

The PRIMES model has among other things been used to evaluate a set of policies envisaged by the European Commission in the negotiations for the Kyoto Protocol and, to prepare the European Union Energy and Emissions Outlook.[1]

Sectoral coverage:

  • Fuel types: 24 energy forms (Coal, Lignite and Peat, Crude-Oil, Residual Fuel Oil, Diesel Oil, Liquefied Petroleum Gas, Kerosene, Gasoline, Naphta, Other oil products, Bio-fuels, Natural and derived gas, Thermal Solar (active), Geothermal low and high enthalpy, Steam (industrial and distributed heat), Electricity, Biomass and Waste, Hydrogen, Solar electricity, Wind, Hydro)
  • (Energy) Demand: 5 Sectors with up to 30 subsectors each (Residential, Commercial, Industry, Transports, Transport modes)
  • (Energy) Supply: 3 Sectors (Electricity, Refineries, Natural Gas)

+Electricity is modelled in large detail:*

  • 148 different plant types per country for existing thermal plants
  • 678 different plant types per country for new thermal plants
  • 3 different plant types per country f. exist. reservoir thermal plants
  • 30 different plant types per country f. exist. intermitt. plants

Natural Gas is modelled in regional supply detail (Europe, Russia, Middle Africa, North Sea, etc. ...) as well as the gas transportation and distribution network.[1]

Behavioural Assumptions:

PRIMES simulates a market equilibrium for energy supply and demand in the European Union member states. The modular structure of PRIMES reflects a distribution of decision making among agents that decide individually about their supply, demand, combined supply and demand, and prices. Then the market integrating part of PRIMES simulates market clearing. The equilibrium is static within each period but repeated in a time forward path under changing conditions.

Both, consumers and producers respond to changes in price. The factors determining demand for and supply of each fuel are analysed and represented. Price driven equilibrium is considered in all energy and environment markets. This includes Europe wide clearing of oil and gas markets, as well as Europe wide networks, such as the Europe wide power grid and natural gas networks.

The model explicitly considers the existing stock of equipment, its normal decommissioning and the possibility of premature replacement. Consumers and Producers select the technology on an economic basis and can - in doing so - be influenced by instruments such as taxes, subsidies, regulation or market conditions of technology changes.

The electricity module covers the whole of Europe, while representing chronological load curves and dispatching at the national level. The natural gas distribution market clears at a multinational level which exceeds the European Union. While the refinery sector operates at a national level only, the capacities, market shares and prices depend an Europe wide competition.

Energy activities and pollution abatement choices are related to resulting pollution. The optimisation modules consider energy costs as well as the costs of the constraints imposed by environmental regulation.[1]

Time Horizon:

1990 - 2030 in periods of 5 years

Required technical infrastructure:

  • GAMS Software package with PATH solver and Cplex
  • MS Exel Version 7 or later
  • PC Pentium

Structure of Input Data:

Data to calibrate the model (needed for all EU-member states)

  • Macroecenomic data that correspond to demographics, national accounts, sectoral activity and income variables.
  • Structure of energy consumption and structure of activity variables. Some indicators regarding specific energy consumption are also needed. (The darabases MURE, IKARUS, ODYSSE and national sources have been used.)
  • Technical-economic data for technologies and sub-sectors (e.g. capital cost, unit efficiency, variable cost, lifetime, etc.)[1]

Model Extensions:

Links to other Models, Projects, Networks:

- used with POLES

Regional scope:

Regions: 30 (EU-25, EU Candidates (Bulgaria, Romania, Turkey), Norway, Switzerland)[1]

See also


  1. 1.0 1.1 1.2 1.3 1.4 1.5 JRC: IA TOOLS. Supporting inpact assessment in the European Commission. [1]