remindmodel · fschreyer · Mar 14, 2024 · Oct 9, 2023 · Feb 16, 2024 · Feb 21, 2024
diff --git a/CHANGELOG.md b/CHANGELOG.md
@@ -22,6 +22,8 @@ The format is based on [Keep a Changelog](https://keepachangelog.com/en/1.0.0/).
 - **core** change of preference parameters and associated computation of interest rates/mark ups 	
 - **scripts** add script to automatically check project summations from piamInterfaces
     [[#1587](https://github.com/remindmodel/remind/pull/1587)]
+- **32_power** extend and reparameterize flexibility tax implementation for electrolysis for hydrogen production
+- **21_tax** add SE tax on electricity going into electrolysis for hydrogen production
 - **scripts** add compareScenarios section for MAGICC7 AR6 output
     [[#1615](https://github.com/remindmodel/remind/pull/1615)
 

diff --git a/core/bounds.gms b/core/bounds.gms
@@ -427,9 +427,6 @@ loop(regi,
 *** Fixing will produce clearly attributable errors (good for debugging) when using inconsistent data, as the GAMS accuracy when comparing fixed results is very high (< 1e-8).
 ***vm_prodFe.fx("2005",regi,se2fe(enty,enty2,te)) = sum(fe2ppfEn(enty2,in), pm_cesdata("2005",regi,in,"quantity") );
 
-vm_deltaCap.up(t,regi,"gasftrec",rlf)$(t.val gt 2005)   = 0.0;
-vm_deltaCap.up(t,regi,"gasftcrec",rlf)$(t.val gt 2005)  = 0.0;
-
 $ontext
 *** -------------------------------------------------------------
 *** *RP* Chinese depoyment of coal power plants and coal use in industry was probably not only demand-driven, but also policy-driven (faster than demand). Therefore, we implement lower bounds on coal power plants and solid coal use:

diff --git a/core/datainput.gms b/core/datainput.gms
@@ -811,9 +811,9 @@ loop(regi,
 
 *RP* calculate annuity of a technology
 p_discountedLifetime(te) = sum(opTimeYr, (sum(regi, pm_omeg(regi,opTimeYr,te))/sum(regi,1)) / 1.06**opTimeYr.val );
-p_teAnnuity(te) = 1/p_discountedLifetime(te) ;
+pm_teAnnuity(te) = 1/p_discountedLifetime(te) ;
 
-display p_discountedLifetime, p_teAnnuity;
+display p_discountedLifetime, pm_teAnnuity;
 
 *** read in data on Nuclear capacities used as bound on vm_cap.fx("2015",regi,"tnrs","1"), vm_deltaCap.fx("2020",regi,"tnrs","1") and vm_deltaCap.up("2025" and "2030")
 parameter pm_NuclearConstraint(ttot,all_regi,all_te)       "parameter with the real-world capacities, construction and plans"

diff --git a/core/declarations.gms b/core/declarations.gms
@@ -307,7 +307,7 @@ p_share_seh2_s(ttot,all_regi)                        "share of hydrogen used for
 p_share_seel_s(ttot,all_regi)                        "Share of electricity used for stationary sector (feels). [0..1]"
 
 p_discountedLifetime(all_te)                         "Sum over the discounted (@6%) depreciation factor (omega)"
-p_teAnnuity(all_te)                                  "Annuity factor of a technology"
+pm_teAnnuity(all_te)                                  "Annuity factor of a technology"
 
 ;
 

diff --git a/core/sets.gms b/core/sets.gms
@@ -204,7 +204,7 @@ all_te          "all energy technologies, including from modules"
         solhe           "solar thermal heat generation"
         tnrs            "thermal nuclear reactor (simple structure)"
         fnrs            "fast nuclear reactor (simple structure)"
-        elh2            "hydrogen elecrolysis"
+        elh2            "hydrogen electrolysis, using grid electricity"
         h2turb          "hydrogen turbine for electricity production"
         elh2VRE         "dummy technology: hydrogen electrolysis; to demonstrate the capacities and SE flows inside the storXXX technologies"
         h2turbVRE       "dummy technology: hydrogen turbine for electricity production; to demonstrate the capacities and SE flows inside the storXXX technologies"

diff --git a/main.gms b/main.gms
@@ -1000,9 +1000,9 @@ parameter
   cm_PriceDurSlope_elh2       "slope of price duration curve of electrolysis"
 ;
   cm_PriceDurSlope_elh2 = 15;  !! def = 15
-*'  cm_PriceDurSlope_elh2, slope of price duration curve for electrolysis (increase means more flexibility subsidy for electrolysis H2)
+*' cm_PriceDurSlope_elh2, slope of price duration curve for electrolysis (increase means more flexibility subsidy for electrolysis H2)
 *' This switch only has an effect if the flexibility tax is on by cm_flex_tax set to 1
-*'
+*' Default value is based on data from German Langfristszenarien (see ./modules/32_power/IntC/datainput.gms).
 parameter
   cm_FlexTaxFeedback          "switch deciding whether flexibility tax feedback on buildlings and industry electricity prices is on"
 ;

diff --git a/modules/21_tax/off/not_used.txt b/modules/21_tax/off/not_used.txt
@@ -70,3 +70,6 @@ vm_costInvTeDir,input,only needed if tax is on
 vm_costInvTeAdj,input,only needed if tax is on
 pm_cintraw,input,only needed if tax is on
 pm_gdp,input,only needed if tax is on
+pm_cf,input,only needed if tax is on
+vm_shDemSeel,input,only needed if tax is on
+pm_teAnnuity,input,only needed if tax is on
diff --git a/modules/21_tax/on/declarations.gms b/modules/21_tax/on/declarations.gms
@@ -17,6 +17,7 @@ p21_bio_EF(ttot,all_regi)                      "bioenergy emission factor, which
 p21_tau_Import(ttot,all_regi,all_enty,tax_import_type_21)         "tax on energy imports, only works on energy carriers traded on nash markets, tax defined as share of world market price pm_pvp [Unit: share]"
 pm_tau_pe_tax(ttot,all_regi,all_enty)                 "pe tax path"
 pm_tau_ces_tax(ttot,all_regi,all_in)                  "ces production tax to implement CES mark-up cost in a budget-neutral way"
+p21_tau_SE_tax(ttot,all_regi,all_te)                  "maximum tax rate for SE electricity tax, used for taxes on electrolysis"
 p21_tau_fe_tax(ttot,all_regi,emi_sectors,all_enty)    "tax path for final energy"
 p21_tau_fe_sub(ttot,all_regi,emi_sectors,all_enty)    "subsidy path for final energy"
 
@@ -39,6 +40,7 @@ p21_taxemiMkt0(ttot,all_regi,all_emiMkt)                     "reference level va
 p21_taxrevFlex0(ttot,all_regi)                               "reference level value of flexibility tax"
 p21_taxrevImport0(ttot,all_regi,all_enty,tax_import_type_21) "tax revenues from import tax in the previous iteration"
 p21_taxrevChProdStartYear0(ttot,all_regi)                    "reference level value of tax to limit changes compared to reference run in cm_startyear"
+p21_taxrevSE0(ttot,all_regi)                                 "reference level value of tax on SE electricity demand"
 
 p21_taxrevGHG_iter(iteration,ttot,all_regi)                "reference level value of GHG emission tax revenue"
 p21_taxrevCCS_iter(iteration,ttot,all_regi)                "reference level value of CCS tax revenue"
@@ -55,6 +57,7 @@ p21_implicitDiscRate_iter(iteration,ttot,all_regi)         "reference level valu
 p21_taxrevFlex_iter(iteration,ttot,all_regi)               "reference level value of flexibility tax revenue"
 p21_taxrevImport_iter(iteration,ttot,all_regi,all_enty)    "reference level value of import tax"
 p21_taxrevChProdStartYear_iter(iteration,ttot,all_regi)    "Difference to tax revenues in last iteration for: tax to limit changes compared to reference run in cm_startyear"
+p21_taxrevSE_iter(iteration,ttot,all_regi)                 "Difference to tax revenues in last iteration for: tax on SE electricity demand"
 
 p21_CO2TaxSectorMarkup(ttot,all_regi,emi_sectors)          "CO2 tax markup in building, industry or transport sector"
 
@@ -64,6 +67,8 @@ p21_tau_CO2_tax_gdx(ttot,all_regi)           "tax path from gdx, may overwrite d
 p21_tau_CO2_tax_gdx_bau(ttot,all_regi)       "tax path from gdx, may overwrite default values"
 
 p21_implicitDiscRateMarg(ttot,all_regi,all_in)  "Difference between the normal discount rate and the implicit discount rate"
+
+p21_tau_SE_tax_rampup(ttot,all_regi,all_te,teSeTax_coeff)  "Paramters of logistic function to describe relationship between SE electricity tax rate and share of technology in total electricity demand"
 ;
 
 
@@ -118,11 +123,13 @@ v21_implicitDiscRate(ttot,all_regi)              "implicit tax on energy efficie
 v21_taxemiMkt(ttot,all_regi,all_emiMkt)         "tax on greenhouse gas emissions"
 v21_taxrevImport(ttot,all_regi,all_enty)        "net change vs. last iteration of tax revenues from energy import tax"
 v21_taxrevChProdStartYear(ttot,all_regi)        "tax to limit changes compared to reference run in cm_startyear"
+v21_taxrevSE(ttot,all_regi)                     "tax on SE electricity demand, used for taxes on electrolysis"
 ;
 
 Positive Variable
 v21_emiALLco2neg(ttot,all_regi)             "negative part of total CO2 emissions"
 v21_emiALLco2neg_slack(ttot,all_regi)       "dummy variable to extract negatice CO2 emissions from emiAll"
+v21_tau_SE_tax(ttot,all_regi,all_te)        "tax rate of tax on SE electricity demand, used for taxes on electrolysis"
 ;
 
 equations 
@@ -147,6 +154,8 @@ q21_implicitDiscRate(ttot,all_regi)             "calculation of the implicit dis
 q21_taxemiMkt(ttot,all_regi,all_emiMkt)         "calculation of specific emission market tax on CO2 emissions"
 q21_taxrevImport(ttot,all_regi,all_enty)        "calculation of import tax"
 q21_taxrevChProdStartYear(ttot,all_regi)        "calculation of tax to limit changes compared to reference run in cm_startyear"
+q21_taxrevSE(ttot,all_regi)                     "calculation of tax on SE electricity demand, used for taxes on electrolysis"
+q21_SeTaxRate(ttot,all_regi,all_te)             "calculation of SE tax rate, used for taxes on electrolysis"
 ;
 
 $ifthen.importtaxrc "%cm_taxrc_RE%" == "REdirect"

diff --git a/modules/21_tax/on/equations.gms b/modules/21_tax/on/equations.gms
@@ -36,6 +36,7 @@ q21_taxrev(t,regi)$(t.val ge max(2010,cm_startyear))..
   + v21_taxrevCCS(t,regi) 
   + v21_taxrevNetNegEmi(t,regi)
   + sum(entyPe, v21_taxrevPE(t,regi,entyPe))
+  + v21_taxrevSE(t,regi)
   + v21_taxrevFE(t,regi)
   + sum(in, v21_taxrevCES(t,regi,in))
   + v21_taxrevResEx(t,regi)   
@@ -122,6 +123,26 @@ q21_taxrevPE(t,regi,entyPe)$(t.val ge max(2010,cm_startyear))..
 v21_taxrevPE(t,regi,entyPe) =e= pm_tau_pe_tax(t,regi,entyPe) * vm_prodPe(t,regi,entyPe)
                           - p21_taxrevPE0(t,regi,entyPe);
 
+
+***---------------------------------------------------------------------------
+*' Calculation of SE tax: tax rate times secondary energy times secondary energy demand
+*' Typically, energy taxes are accounted on FE level. However, this tax is used to 
+*' account for taxes and grid fees for the electricity input to electrolysis, which is an SE2SE technology.  
+***---------------------------------------------------------------------------
+
+q21_taxrevSE(t,regi)$( t.val ge max(2010, cm_startyear) ) ..
+  v21_taxrevSE(t,regi)
+  =e=
+    sum(se2se(enty,enty2,te)$(teSeTax(te)),
+*** v21_tau_SE_tax is the (endogenous calculated) tax rate,
+*** i.e. electricity price increase due to taxes and grid fees
+      v21_tau_SE_tax(t,regi,te) 
+    * vm_demSe(t,regi,enty,enty2,te)
+    )
+  - p21_taxrevSE0(t,regi)
+;
+
+
 ***---------------------------------------------------------------------------
 *'  Calculation of final Energy taxes: effective tax rate (tax - subsidy) times FE use in the specific sector
 *'  Documentation of overall tax approach is above at q21_taxrev.
@@ -253,7 +274,7 @@ q21_taxemiMkt(t,regi,emiMkt)$(t.val ge max(2010,cm_startyear))..
 ; 
 
 ***---------------------------------------------------------------------------
-*'  FS: Calculation of tax/subsidy on technologies with inflexible/flexible electricity input 
+*'  Calculation of tax/subsidy on technologies with inflexible/flexible electricity input 
 *'  This is to emulate the effect of lower/higher electricity prices in high VRE systems on flexible/inflexible electricity demands. 
 ***---------------------------------------------------------------------------
 
@@ -272,7 +293,7 @@ q21_taxrevFlex(t,regi)$( t.val ge max(2010, cm_startyear) ) ..
 
 
 ***---------------------------------------------------------------------------
-*'  FS: (PE) import tax 
+*'  (PE) import tax 
 *'  can be used to place taxes on PE energy imports 
 *'  e.g. bioenergy import taxes due to sustainability concerns by importers
 ***---------------------------------------------------------------------------
@@ -342,5 +363,30 @@ q21_taxrevChProdStartYear(t,regi)$(t.val ge max(2010,cm_startyear))..
 ;
 
 
+*' This calculates the SE tax rate for electricity going into electrolysis.
+*' It contains the final energy tax rate for electricity use in industry and
+*' grid fees that are assumed be equal to the investment cost of tdfels.
+*' We furthermore assume that these taxes and fees are small at low shares
+*' of electrolysis in total electricity demand as electrolysis has power system
+*' benefits at low shares. The tax rate increases with increasing share of electrolysis
+*' following a logistic curve. It starts at close to zero tax rate for a share o 0%, reaches half
+*' of the full tax rate at 10% share and is within 1% of the full tax rate above a 25% share of
+*' electrolysis electricity demand within total electricity demand. The parameters
+*' to define this functional relationsship are set to in the preloop file.
+q21_SeTaxRate(t,regi,te)$(teSeTax(te))..
+  v21_tau_SE_tax(t,regi,te)
+  =e=
+*** maximum electrolysis SE tax rate
+  p21_tau_SE_tax(t,regi,te)
+*** logistic ramp-up function depending on electrolysis share in total electricity demand vm_shDemSeel
+  / ( 1 + 
+      (exp(-p21_tau_SE_tax_rampup(t,regi,te,"a")
+        * (vm_shDemSeel(t,regi,te) * 100
+          - p21_tau_SE_tax_rampup(t,regi,te,"b"))
+          )
+      )
+  )
+;
+
 
 *** EOF ./modules/21_tax/on/equations.gms
diff --git a/modules/21_tax/on/postsolve.gms b/modules/21_tax/on/postsolve.gms
@@ -57,6 +57,10 @@ p21_taxrevImport0(ttot,regi,tradePe,tax_import_type_21) =  p21_tau_Import(ttot,r
 
 
 p21_taxrevChProdStartYear0(t,regi) = sum(en2en(enty,enty2,te), vm_changeProdStartyearCost.l(t,regi,te)$( (t.val gt 2005) AND (t.val eq cm_startyear ) ) );
+p21_taxrevSE0(t,regi) =     sum(se2se(enty,enty2,te)$(teSeTax(te)), 
+                                    v21_tau_SE_tax.l(t,regi,te) 
+                                  * vm_demSe.l(t,regi,enty,enty2,te));
+
 
 *** Save reference level of tax revenues for each iteration
 p21_taxrevGHG_iter(iteration+1,ttot,regi) = v21_taxrevGHG.l(ttot,regi);
@@ -75,6 +79,7 @@ p21_implicitDiscRate_iter(iteration+1,ttot,regi) = v21_implicitDiscRate.l(ttot,r
 p21_taxrevFlex_iter(iteration+1,ttot,regi) = v21_taxrevFlex.l(ttot,regi);
 p21_taxrevImport_iter(iteration+1,ttot,regi,tradePe) = v21_taxrevImport.l(ttot,regi,tradePe);
 p21_taxrevChProdStartYear_iter(iteration+1,t,regi) = v21_taxrevChProdStartYear.l(t,regi);
+p21_taxrevSE_iter(iteration+1,t,regi) = v21_taxrevSE.l(t,regi);
 
 display p21_taxrevFE_iter;
 

diff --git a/modules/21_tax/on/preloop.gms b/modules/21_tax/on/preloop.gms
@@ -139,6 +139,24 @@ display p21_tau_fe_sub;
 display p21_tau_fe_tax;
 display p21_tau_pe2se_sub, p21_tau_fuEx_sub;
 
+*** SE Tax
+*** SE tax is currently used to tax electricity going into electrolysis. There is a maximum tax rate that is assumed
+*** to be the sum of the industry electricity FE tax and the investment cost per unit electricity of the grid (grid fee). 
+*** There is a ramp up of the SE electricity tax for electrolysis depending on the share of electrolysis in total electricity demand
+*** described by a logistic function. This results in low taxes for electrolysis at low shares of electrolysis in the power system
+*** as the technology has system benefits in this domain. At higher shares this rapidly increases and converges towards the maximum tax rate.
+*** See the equations file of the tax module for more information on the SE tax.
+*** Parameter datainput needs to happen here because pm_tau_fe_tax, the final energy tax rate, is set in this file and not in the datainput file.
+p21_tau_SE_tax(t,regi,"elh2") = p21_tau_fe_tax(t,regi,"indst","feels")
+*** calculate grid fees as levelized cost of CAPEX from tdels, the electricity transmission and distribution grid
+*** by annualising the CAPEX and dividing by the capacity factor
+                                  + pm_inco0_t(t,regi,"tdels") 
+                                  * pm_teAnnuity("tdels")
+                                  / pm_cf(t,regi,"tdels");
+
+p21_tau_SE_tax_rampup(t,regi,te,"a") = 0.4;
+p21_tau_SE_tax_rampup(t,regi,te,"b") = 10;
+
 *LB* initialization of vm_emiMac
 vm_emiMac.l(ttot,regi,enty) = 0;
 *LB* initialization of v21_emiALLco2neg
@@ -159,4 +177,7 @@ v21_taxrevImport.l(t,regi,tradePe) = 0;
 *** initialize taxrevImport
 v21_taxrevChProdStartYear.l(t,regi) = 0;
 
+*** initialize SE tax rate
+v21_tau_SE_tax.l(t,regi,te)=0;
+
 *** EOF ./modules/21_tax/on/preloop.gms
diff --git a/modules/21_tax/on/presolve.gms b/modules/21_tax/on/presolve.gms
@@ -53,5 +53,8 @@ p21_taxrevImport0(ttot,regi,tradePe,tax_import_type_21) =  p21_tau_Import(ttot,r
   p21_tau_Import(ttot, regi, tradePe, tax_import_type_21)$sameas(tax_import_type_21, "avCO2taxmarkup") * max(pm_taxCO2eqSum(ttot,regi), sum(regi2, pm_taxCO2eqSum(ttot,regi2))/(card(regi2))) * pm_cintraw(tradePe) * vm_Mport.l(ttot,regi,tradePe);
 
 p21_taxrevChProdStartYear0(t,regi) = sum(en2en(enty,enty2,te), vm_changeProdStartyearCost.l(t,regi,te)$( (t.val gt 2005) AND (t.val eq cm_startyear ) ) );
+p21_taxrevSE0(t,regi) =     sum(se2se(enty,enty2,te)$(teSeTax(te)), 
+                                    v21_tau_SE_tax.l(t,regi,te) 
+                                  * vm_demSe.l(t,regi,enty,enty2,te));
 
 *** EOF ./modules/21_tax/on/presolve.gms
diff --git a/modules/21_tax/on/sets.gms b/modules/21_tax/on/sets.gms
@@ -15,6 +15,19 @@ $else.regi_bio_EFTax
    set regi_bio_EFTax21(all_regi) "regions in which an emission-factor-based bioenergy tax is active" / %cm_regi_bioenergy_EFTax% /;
 $endif.regi_bio_EFTax
 
+Sets
+teSeTax(all_te)       "all technologies which SE electricity demand tax"
+/
+elh2
+/
+
+teSeTax_coeff          "coefficients of logistic function to describe relationsship between SE tax rate and share of technology in total SE demand"
+/
+  "a"
+  "b"
+/
+;  
+
 *** EOF ./modules/21_tax/on/sets.gms
 
 *** Module specific set

diff --git a/modules/32_power/DTcoup/not_used.txt b/modules/32_power/DTcoup/not_used.txt
@@ -15,3 +15,4 @@ cm_emiscen,input,questionnaire
 cm_ccapturescen,input,questionnaire
 pm_boundCapCCS,input,questionnaire
 pm_cap0,input,questionnaire
+vm_shDemSeel,input,only used in IntC realization
diff --git a/modules/32_power/IntC/bounds.gms b/modules/32_power/IntC/bounds.gms
@@ -34,9 +34,11 @@ if ( cm_flex_tax eq 1,
 	  vm_capFac.lo(t,regi,teFlexTax)$(t.val ge 2010) = 0.1;
     vm_capFac.up(t,regi,teFlexTax)$(t.val ge 2010) = pm_cf(t,regi,teFlexTax);
   else 
-*** if flexibility tax feedback is off, only flexibliity tax benefit for flexible technologies and 0.5 capacity factor
-    vm_capFac.fx(t,regi,teFlex)$(t.val ge 2010) = 0.5;
-*** electricity price of inflexible technologies the same w/o feedback
+*** if flexibility tax feedback is off, flexibility tax benefit only for flexible technologies and capacity factors fixed.
+*** Assume capacity factor of flexible electrolysis to be 0.38.
+*** The value based on data from German Langfristszenarien (see flexibility tax section in datainput file).
+    vm_capFac.fx(t,regi,"elh2")$(t.val ge 2010) = 0.38;
+*** electricity price of inflexible technologies the same as w/o feedback
     v32_flexPriceShare.fx(t,regi,te)$(teFlexTax(te) AND NOT(teFlex(te))) = 1;
   );
 );

diff --git a/modules/32_power/IntC/datainput.gms b/modules/32_power/IntC/datainput.gms
@@ -96,7 +96,18 @@ p32_flex_maxdiscount(regi,te) = p32_flex_maxdiscount(regi,te) * sm_TWa_2_MWh * s
 display p32_flex_maxdiscount;
 $offtext
 
-*** initialize p32_PriceDurSlope parameter
+*** Flexibility Tax Parameter
+
+*** Both flexibility tax parameters are based on a regression analysis with hourly dispatch data from high-VRE scenarios of the Langfristszenarien
+*** for Germany provided by the Enertile power system model.
+*** See: https://langfristszenarien.de/enertile-explorer-de/szenario-explorer/angebot.php
+
+*** This parameter determines by the maximum electricity price reduction for electrolysis at 100% VRE share and 0% share of electrolysis in total electricity demand.
+*** Standard value is derived based on the regression of the German Langfristzenarien.
 p32_PriceDurSlope(regi,"elh2") = cm_PriceDurSlope_elh2;
 
+*** Slope of increase of electricity price for electrolysis with increasing share of electrolysis in power system
+*** The value of 1.1 is derived from the regression of the German Langfristzenarien.
+p32_flexSeelShare_slope(t,regi,"elh2") = 1.1;
+
 *** EOF ./modules/32_power/IntC/datainput.gms