Commodity prices
Commodity prices are a vital component of any production-cost model. They determine the cost of energy production for each generation type which determines their relative position in the supply stack and ultimately the price of electricity.
For our forecast commodity price we use numbers provided in the 2023 Annual Energy Outlook (AEO) from the US Energy Information Administration (EIA). Specifically, we use Table 3 of the 2023 AEO reference case - Energy Prices by Sector and Source. These provide annual commodity prices coal and natural gas.
Assumptions
Nuclear & lignite
In the case of nuclear, plants run baseload and act as price takers as opposed to price markers. As such we make no assumptions about the fuel costs of either uranium, other than they are sufficiently cheap to run all the time. This is implemented by a nominal, negative fuel cost of -1000 USD. Similarly we assume a nominal -5 USD fuel cost for lignite given the 3 operational lignite facilities in ERCOT (San Miguel, Oak Grove, Major Oak) consistently act as price takers in the market.
Updated 3 months ago