calculate_full_cost_prices

Function calculate_full_cost_prices 

Source
fn calculate_full_cost_prices<'a, I, J>(
    activity_for_existing: I,
    activity_for_candidates: J,
    annual_activities: &HashMap<AssetRef, Activity>,
    shadow_prices: &CommodityPrices,
    year: u32,
    markets_to_price: &HashSet<(CommodityID, RegionID)>,
) -> HashMap<(CommodityID, RegionID, TimeSliceID), MoneyPerFlow>
where I: Iterator<Item = (&'a AssetRef, &'a TimeSliceID, Activity)>, J: Iterator<Item = (&'a AssetRef, &'a TimeSliceID, Activity)>,
Expand description

Calculate full cost prices for a set of commodities.

This pricing strategy aims to incorporate the full cost of commodity production into the price.

For a given asset, a full cost can be calculated for each SED/SVD output, which is the sum of:

  • Annual capital costs/fixed operating costs: Calculated based on the capacity of the asset and the total annual output. If an asset has multiple SED/SVD outputs, then these costs are shared equally over all outputs according to their flow coefficients.
  • Generic activity costs: Activity-related costs not tied to a specific SED/SVD output (variable operating costs, cost of purchasing inputs, plus all levies and flow costs not associated with specific SED/SVD outputs). As above, these are shared over all SED/SVD outputs according to their flow coefficients.
  • Commodity-specific activity costs: flow costs/levies for the specific SED/SVD output.

For example, consider an asset A(SED) -> B(SED) + 2C(SED) + D(OTH), with the following costs:

  • Annual capital cost + fixed operating cost: 2.5 per unit capacity
  • Variable operating cost: 5 per unit activity
  • Production levy on C: 3 per unit flow
  • Production levy on D: 4 per unit flow
  • Shadow price of A: 1 per unit flow

If capacity is 4 and annual activity is 2:

  • Annual capital + fixed operating cost per activity = (2.5 * 4) / 2 = 5
  • Annual capital + fixed operating cost per SED/SVD output = 5 / (1 + 2) = 1.666
  • Generic activity cost per activity = (1 + 5 + 4) = 10
  • Generic activity cost per SED/SVD output = 10 / (1 + 2) = 3.333
  • Full cost of B = 1.666 + 3.333 = 5.0
  • Full cost of C = 1.666 + 3.333 + 3 = 8.0

If any existing assets produce a given commodity in a particular region and time slice, the price is taken from the asset with the highest full cost among those existing assets. If no existing assets produce the commodity in that region and time slice (in particular, this will occur when there’s no demand for the commodity), then candidate assets are considered: we take the price from the candidate asset with the lowest full cost, assuming maximum possible dispatch (i.e. the single candidate asset that would be most competitive if a small amount of demand was added).

§Arguments

  • activity_for_existing - Iterator over activity from optimisation solution for existing assets
  • activity_for_candidates - Iterator over activity from optimisation solution for candidate assets. Note: we only need the keys, since we assume full dispatch for candidates.
  • annual_activities - Map of annual activities for each asset computed by calculate_annual_activities. This only needs to include existing assets.
  • shadow_prices - Shadow prices for all commodities
  • year - The year for which prices are being calculated
  • markets_to_price - Set of markets to calculate full cost prices for

§Returns

A map of full cost prices for the specified markets in all time slices