change of preference parameters

CHANGELOG.md

@@ -19,6 +19,7 @@ The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/).
 - **core** add process emissions from chemicals subsector and from plastics incineration
 - **37_industry** add process-based steel model as alternative to CES-tree branch
 - **47_regipol** add support for delaying quantity targets and improving regional emission tax convergence
+- **core** change of preference parameters and associated computation of interest rates/mark ups 	
 
 ### fixed
 - fixed weights of energy carriers in `pm_IndstCO2Captured`

core/datainput.gms

@@ -55,6 +55,7 @@ pm_ttot_2_tall(ttot,tall)$((ttot.val = tall.val) ) = Yes;
 *** define pm_prtp according to cm_prtpScen:
 if(cm_prtpScen eq 1, pm_prtp(regi) = 0.01);
 if(cm_prtpScen eq 3, pm_prtp(regi) = 0.03);
+pm_ies(regi) = 0.5;
 
 *------------------------------------------------------------------------------------
 *------------------------------------------------------------------------------------
@@ -272,16 +273,16 @@ $offdelim
 loop(te$(fm_dataglob("constrTme",te) > 0),
   p_tkpremused(regi,te) = 1/fm_dataglob("constrTme",te)
     * sum(integ$(integ.val <= fm_dataglob("constrTme",te)),
-$if %cm_techcosts% == "REG"  (1.03 + pm_prtp(regi) + p_risk_premium_constr(regi) )  ** (integ.val - 0.5) - 1
-$if %cm_techcosts% == "GLO"  (1.03 + pm_prtp(regi) )                                 ** (integ.val - 0.5) - 1
+$if %cm_techcosts% == "REG"  (1 + 0.02/pm_ies(regi) + pm_prtp(regi) + p_risk_premium_constr(regi) )  ** (integ.val - 0.5) - 1
+$if %cm_techcosts% == "GLO"  (1 + 0.02/pm_ies(regi) +  pm_prtp(regi) )                               ** (integ.val - 0.5) - 1
       )
 );
 *** nuclear sees 3% higher interest rates during construction time due to higher construction time risk, see "The economic future of nuclear power - A study conducted at The University of Chicago" (2004)
 loop(te$sameas(te,"tnrs"),
   p_tkpremused(regi,te) = 1/fm_dataglob("constrTme",te)
     * sum(integ$(integ.val <= fm_dataglob("constrTme",te)),
-$if %cm_techcosts% == "REG"  (1.03 + 0.03 + pm_prtp(regi) + p_risk_premium_constr(regi) )  ** (integ.val - 0.5) - 1
-$if %cm_techcosts% == "GLO"  (1.03 + 0.03 + pm_prtp(regi) )                                 ** (integ.val - 0.5) - 1
+$if %cm_techcosts% == "REG"  (1 + 0.02/pm_ies(regi) + 0.03 + pm_prtp(regi) + p_risk_premium_constr(regi) )  ** (integ.val - 0.5) - 1
+$if %cm_techcosts% == "GLO"  (1 + 0.02/pm_ies(regi) + 0.03 + pm_prtp(regi) )                                ** (integ.val - 0.5) - 1
       )
 );
 

core/equations.gms

@@ -57,7 +57,7 @@ q_costInvTeDir(t,regi,te)..
   =e=
   vm_costTeCapital(t,regi,te)
   * sum(te2rlf(te,rlf), vm_deltaCap(t,regi,te,rlf))
-  * (1.02 + pm_prtp(regi) ) ** (pm_ts(t) / 2) !! This increases the investments as if the money was actually borrowed
+  * (1 + 0.02/pm_ies(regi) + pm_prtp(regi) ) ** (pm_ts(t) / 2) !! This increases the investments as if the money was actually borrowed
   !! half a time step earlier, using an interest rate of pm_prtp + 2%, which is close to the model-endogenous interest rate.
   !! We do this to reduce the difference to the previous version where the effect of deltacap on capacity was split
   !! half to the current and half to the next time.
@@ -74,7 +74,7 @@ q_costInvTeAdj(t,regi,teAdj)..
   vm_costTeCapital(t,regi,teAdj) * (
     (p_adj_coeff(t,regi,teAdj) * v_adjFactor(t,regi,teAdj)) + (p_adj_coeff_glob(teAdj) * v_adjFactorGlob(t,regi,teAdj))
   )
-  * (1.02 + pm_prtp(regi) ) ** (pm_ts(t) / 2) !! This increases the investments as if the money was actually borrowed
+  * (1 + 0.02/pm_ies(regi) + pm_prtp(regi) ) ** (pm_ts(t) / 2) !! This increases the investments as if the money was actually borrowed
   !! half a time step earlier, using an interest rate of pm_prtp + 2%, which is close to the model-endogenous interest rate.
   !! We do this to reduce the difference to the previous version where the effect of deltacap on capacity was split
   !! half to the current and half to the next time.

core/postsolve.gms

@@ -603,7 +603,7 @@ o_margAdjCostInv(ttot,regi,te)$(ttot.val ge max(2010, cm_startyear) AND teAdj(te
       + p_adj_deltacapoffset("2010",regi,te)$(ttot.val eq 2010) + p_adj_deltacapoffset("2015",regi,te)$(ttot.val eq 2015)
       + p_adj_deltacapoffset("2020",regi,te)$(ttot.val eq 2020) + p_adj_deltacapoffset("2025",regi,te)$(ttot.val eq 2025)
     )
-    * (1.02 + pm_prtp(regi)) ** (pm_ts(ttot) / 2)
+    * (1 + 0.02/pm_ies(regi) + pm_prtp(regi)) ** (pm_ts(ttot) / 2)
 ;
 
 *** CG: calculate average adjustment cost for capacity investment: vm_costInvTeAdj / vm_deltaCap
@@ -850,7 +850,7 @@ o_carbon_reemitted(ttot,regi,"co2")$(ttot.val ge 2005) =
 
 *CG**ML*: capital interest rate
 p_r(ttot,regi)$(ttot.val gt 2005 and ttot.val le 2130)
-    = (( (vm_cons.l(ttot+1,regi)/pm_pop(ttot+1,regi)) /
+    = 1 / pm_ies(regi) * (( (vm_cons.l(ttot+1,regi)/pm_pop(ttot+1,regi)) /
       (vm_cons.l(ttot-1,regi)/pm_pop(ttot-1,regi)) )
       ** (1 / ( pm_ttot_val(ttot+1)- pm_ttot_val(ttot-1))) - 1) + pm_prtp(regi)
 ;

main.gms

@@ -658,7 +658,7 @@ parameter
 parameter
   cm_prtpScen               "pure rate of time preference standard values"
 ;
-  cm_prtpScen         = 3;         !! def = 3  !! regexp = 1|3
+  cm_prtpScen         = 1;         !! def = 1  !! regexp = 1|3
 *' *  (1): 1 %
 *' *  (3): 3 %
 *'

modules/23_capitalMarket/debt_limit/datainput.gms

@@ -6,7 +6,6 @@
 *** |  Contact: [email protected]
 *** SOF ./modules/23_capitalMarket/debt_limit/datainput.gms
 
-pm_ies(regi) = 1;
 pm_risk_premium(regi) = 0.0;
 p23_debt_growthCoeff(regi) = 0.2 ;