The fundamentals model forecasts wholesale electricity prices and ancillary service revenues across UK and European markets.
What the fundamentals model covers:
- Capacity buildout: How generation and storage capacity evolves over the forecast horizon
- Demand: Electricity consumption patterns and growth projections
- Generation: Thermal, renewable, hydro, nuclear, and storage dispatch
- Interconnection: Cross-border flows between market zones
- Market prices: Day-ahead and intraday wholesale price formation
- Ancillary services: Frequency response and reserve market dynamics
The fundamentals model produces price forecasts that feed into dispatch modelling
The fundamentals model is a production cost model that simulates electricity market outcomes based on supply, demand, and network constraints. It runs a unit commitment on all generators acorss 15 regions in Europe and GB to decide which are on and off, then redispatches these to match supply and demand at least cost. It runs at 15-minute granularity with a 2018 weather year to capture price volatility and allows power flow across all current and planned interconnectors.
Key outputs include:
- Wholesale electricity prices (day-ahead and intraday)
- Ancillary service prices (frequency response, reserve)
- Generation dispatch by technology
- Cross-border interconnector flows
These price forecasts are then used as inputs to the dispatch model, which optimises battery operation to maximise revenues.
Explore the fundamentals model
How generation and storage capacity evolves
Electricity consumption projections
Thermal, renewable, hydro, nuclear, and storage
Cross-border electricity flows
Frequency response and reserve markets
How price formation differs between markets
Model validation against historical data