EnergySystemsModellingLab / EnergySystemsModellingLab/MUSE2

"full"/"full_average" prices can be elevated by under-utilised capacity

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Description

If assets are under-utilised, the capital cost per unit output can be very high, which elevates prices calculated using the "full"/"full_average" methods.

In later years of simulations, where assets are invested in to meet demands, and unused assets can be decommissioned early (or partially decommissioned), this may not be such a problem as capacities will generally not exist unless utilised.

However, in the first year, we don't do any commissioning/decommissioning and calculate prices based on dispatch of assets defined in the user data. If users have set capacities higher than they need to be, resulting in under-utilised capacity, then prices in the first year may be extremely high as a result of this. To some extent it's down to the user to pick suitable capacities, but that does seem a little harsh given that users won't know how assets will end up being utilised, and since there's no warning about this they'll probably end up confused by the high prices.

Not sure what the best solution is here. We were faced with this problem in MUSE1 and decided to calculate capital/fixed costs based on the capacity that's _actually utilised_, rather than the total capacity that exists (although in that case we didn't have the saving grace of early decommissioning so that was really the only solution). In MUSE2, I think early decommissioning (and especially partial decommissioning) helps a lot, although that won't always happen and obviously doesn't help with the first year.

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