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Title:A complementarity model for the European natural gas market PDF Logo
Authors:Egging, Ruud
Gabriel, Steven A.
Holz, Franziska
Zhuang, Jifang
Issue Date:2007
Series/Report no.:Discussion papers // German Institute for Economic Research 732
Abstract:In this paper, we present a detailed and comprehensive complementarity model for computing market equilibrium values in the European natural gas system. Market players include producers and their marketing arms which we call transmitters, pipeline and storage operators, marketers, LNG liquefiers, regasifiers, tankers, and three end-use consumption sectors. The economic behavior of producers, transmitters, pipeline and storage operators, liquefiers and regasifiers is modeled via optimization problems whose Karush-Kuhn-Tucker (KKT) optimality conditions in combination with market-clearing conditions form the complementarity system. The LNG tankers, marketers and consumption sectors are modeled implicitly via appropriate cost functions, aggregate demand curves, and ex-post calculations, respectively. The model is run on several case studies that highlight its capabilities, including a simulation of a disruption of Russian supplies via Ukraine.
Subjects:European Natural Gas Market
Global LNG market
Mixed Complementarity Problem
JEL:C61
L95
Document Type:Working Paper
Appears in Collections:Publikationen von Forscherinnen und Forschern des DIW
DIW-Diskussionspapiere

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