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We design our models to provide the most accurate and complete answer given the realities of the marketplace.

In development, we deploy insightful techniques, adopt the world’s best practice, and focus on five core modelling principles.

  • Independence
    We build our own power and commodities models, rather than relying on black box third-party models, resulting in greater analytical rigour and objectivity. As we own the code, models can be easily calibrated to each individual market
  • Transparency and Flexibility
    Results can be easily traced back to the underlying assumptions and data. Clients can flex any assumption to reflect their market views, crucial to giving investment committees confidence in various outcomes under different scenarios
  • Consistency
    We integrate major markets to produce fully consistent market outcomes and reflect the potential dispatch of assets. This is increasingly important as power markets integrate and harmonise
  • State-of-the-art
    Our large team of market experts keep the models updated with the latest features and market developments
  • Proven Performance
    Our models must be capable of reproducing important historical time series with a high degree of accuracy

Energy Market Model (Origin)

Origin is Aurora Energy Research’s large-scale energy market model designed to forecast prices, plant dispatch, capacity investment, network flows and transmission capacity up to 2070. Developed since 2014 by a large, dedicated team of modellers, Origin can be adapted to various market designs and scales. From nodal markets with locational marginal pricing and continuous delivery, to multi-stage interconnected price zones, we model all the major power plants in a system, with a wide range of customisable inputs for each generator and market.

What sets Origin apart from other energy market models is its holistic and fully integrated approach. Origin optimizes wholesale power market dispatch and transmission, flexible balancing and ancillary market actions, and capacity investment decisions concurrently. This ensures alignment between market entry, exit, and dispatch outcomes. Our unique approach enables us to accurately forecast capacity markets, incorporating long-term contracts into our endogenous modelling while considering plant-specific and revenue-specific discount rates. Origin has demonstrated its prowess in accurately predicting capacity auction outcomes in various countries, including GB, France, and Poland.

Origin has been specifically designed to capture the intricate interplay between the growth of intermittent supply and flexible demand. In addition to modelling smart, elastic, and inelastic electric vehicles and other behind-the-meter technologies, we have incorporated hydrogen production and consumption technologies into our power modelling framework. This integration enables us to analyse the interactions between electrolysers, renewable generators, and hydrogen consumption for power. By incorporating all critical aspects of power markets, our model empowers users with the necessary tools to simulate the evolving power markets throughout the energy transition.

Origin represents the culmination of our extensive expertise and continuous development, offering unparalleled insights into the future of energy markets. With its proven ability to accurately model power markets, our comprehensive solution enables informed decision-making and strategic planning for stakeholders across the global energy sector.

In addition to configurations focused on power markets, Origin can also be configured to model continental Hydrogen and Carbon markets in a high level of detail, which allows forecasting of Hydrogen or Carbon prices as well as the evolution of future supply and emission stacks. These configurations have been used to develop Aurora’s European Hydrogen and EU-ETS price forecasts.

Global Gas Market Model (AER-GAS)

Our global natural gas dispatch model contains an unprecedented level of detail on global natural gas transportation infrastructure providing long-term projections for the global natural gas markets.

We draw from our in-house suite of models for full consistency throughout our outlooks. We combine the capabilities of our global commodities model AER-GLO and our energy market model Origin to provide global projections for supply and demand, including a detailed view on gas-for-power, to support our gas model. This enables us to capture the complex interactions between energy markets and the global economy, as well as substitutions between different fuels.

Within our global gas market model, we represent the complexity of gas markets with economic accuracy through sophisticated modelling. Our modelling reconciles short-term market behaviour, such as infra-annual supply flexibility, with long-term economics, such as investments in transport capacity additions.

In Europe and North America, we model the entire transmission pipeline network, gas storage facilities, cross-border connections, LNG liquefaction and regasification terminals, and gas extraction sites to understand physical constraints and bottlenecks.

The global LNG market is modelled in detail. We geocode every liquefaction and regasification terminal and simulate the behaviour of the entire fleet of LNG carriers.

Consequently, the global gas market model provides a wide range of outputs, including prices, flows and assets performance, with high granularity. These results underpin our quarterly outlook on European gas markets, but also inform our studies on global gas markets, valuations of infrastructure assets, strategic analysis, security of supply stress-tests, market design assessments, and others.

Global Commodities Model (AER-GLO)

Our global commodities model provides a long-term view on fossil fuel prices, production, and consumption by region.

The model is the first of its kind, linking a global computable general equilibrium model (developed by building on the widely-used GTAP database) with a high-resolution resource extraction module focussing on production and investment decisions within upstream fossil fuel extractive industries.

This unique setup acknowledges the substantial potential for inter-fuel substitution, as well as interactions with the global economy rather than treating non-energy sectors as exogenous model inputs. It includes a detailed representation of sectoral and economy-wide energy demand with a special focus on energy-intensive industries.

Such a modelling framework is crucial to guarantee internally consistent energy scenarios. Several energy majors have already commissioned us to help develop holistic multi-fuel long-term outlooks, across several scenarios, based on the model’s capabilities.

Energy Network Model (AER-EN)

Our energy network model (AER-EN) is fully integrated with our energy market model Origin and models the flows in the network in detail. While building on top of the current network, future network augmentations are considered as well as capacity retirement, capacity expansion and the generation mix as direct inputs from Origin. The network model then solves for the flows and losses on the individual lines of the network which can be analysed for various applications such as network congestion, N-1 contingency analysis or the impact of individual generators on overloaded lines.

Among other applications the network model is used to forecast marginal loss factors (MLFs) in the Australian market. Here we consider the Network Integrated System Plan (ISP) for future network augmentations, industrial load and connection point load forecasts, the future capacity and generation mix from Origin and follows AEMO’s forward looking loss factor methodology. On the other hand, our market model Origin incorporates indicative MLFs into its capacity and dispatch decisions which are informed by the network model. With this integration of Origin and AER-EN we can capture the impact of market scenarios and their resulting capacity and generation mixes on MLFs and vice versa.

Battery Dispatch Model (Chronos)

Our battery dispatch model, Chronos, presents detailed forecasts for the dispatch of a standalone or co-located battery, with forecasts regularly calibrated against historical data.

Building on granular prices provided by our power market model, Chronos encompasses key engineering constraints in battery site construction, regulatory constraints, geographic and operational limitations and other incentives to provide a granular perspective on the performance of batteries. These are combined within an in-house suite of modelling algorithms to forecast optimal trading for the battery operator and performance of the battery itself whilst allowing for the imperfect foresight of future prices and uncertainty in demand.

In addition to Batteries, Chronos can also be configured to model Pumped Hydro storage.

Asset Dispatch Suite (AER-AD)

Alongside Chronos, our wider suite of power asset valuation models use in-house algorithms to simulate asset dispatch across multiple markets for a wide range of technologies against prices generated by our power market model.

Our algorithms take market prices, operational costs, technical and regulatory constraints, as well as other incentives such as embedded benefits, and produce a realistic and granular (typically hourly or half-hourly) dispatch profile, from which forecasts of various revenue and cost streams are derived. In order to ensure that our dispatch outcomes are realistic, our algorithms are regularly calibrated against historical data and are able to take into account real-world factors such as a lack of perfect foresight of future prices. Furthermore, these tools are highly flexible and can be customised to capture detailed asset-specific incentives, constraints and/or operational strategies. This flexibility means that we can produce realistic dispatch behaviour and revenue forecasts not just for generic assets but for a specific asset or combination of assets in question.