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Tel: +44 (0) 121 55 000 44 Fax: +44 (0) 121 585 99 44 Fountain House, Great Cornbow, Halesowen, B63 3BL, UK CSIM3 – The Model.

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Presentation on theme: "Tel: +44 (0) 121 55 000 44 Fax: +44 (0) 121 585 99 44 Fountain House, Great Cornbow, Halesowen, B63 3BL, UK CSIM3 – The Model."— Presentation transcript:

1 Tel: +44 (0) Fax: +44 (0) Fountain House, Great Cornbow, Halesowen, B63 3BL, UK CSIM3 – The Model Explained Vinod Bhatia Operations Director

2 better decisionsthrough modelling Introduction This document is technical model overview of CSIM3 model version Detailed information is provided in the associated Function Specification version All data provided in this document is illustrative All data provided in the associated model files are examples of the scenarios examined by WBCSD-CSI

3 better decisionsthrough modelling Overview Technical Framework The Data Manager The Cement Production Cost The Trading Position Model Files Supplied Scenarios Supplied Model Quick Start

4 better decisionsthrough modelling Technical Framework All data used by the model is held in the Data Manager. Change the data as needed. When the Data Manager is opened, it installs the model engine and a toolbar, which has a button for running the model When the simulation has completed, the model takes the results and saves them in an Excel file, using the Scenario ID as the name of the file. It is important that the Scenario ID is a unique for different data sets. The format of the results is defined by a Results Manager template.

5 better decisionsthrough modelling The Data Manager Each one of the buttons takes you to a separate area of the Data Manager Yellow buttons contain data that is used by the model Red buttons take you to another menu Green buttons take you to other useful sheets

6 better decisionsthrough modelling Model Flow Diagram This diagram shows the logical flow of information and the classification of the different data types.

7 better decisionsthrough modelling Regions The first thing to do is to define the Regions and some basic information User- definable data when yellow Not used by model when grey Up to 20 regions can be set up – to date we have used eight

8 better decisionsthrough modelling Cement Demand Not changeable by user when green The models first task is to try and meet cement demand from domestic clinker capacity It does this by looking at each Regions clinker-making capacity which is defined elsewhere If there is insufficient capacity, it can either build new capacity or import cement A decision to import is based on the economics of trade vs. domestic production

9 better decisionsthrough modelling Regional Capacity There is a lot of capacity information, so each Region has its own page To do this the model needs to how much it will cost to make clinker from its own facilities

10 better decisionsthrough modelling Capacity – Kiln Types & Options A lot of options can be specified for each Region, and options can be added and removed as needed Here we have specified that this Region has existing dry and wet kilns, and three abatement options Every Region always has the ability to add New Dry capacity – so the user cant de-select The tables are quite large so they have been split up in the presentation

11 better decisionsthrough modelling Capacity & Availability (in t clinker) We can specify the actual capacity, availability, remaining life and whether there is planned retirement

12 better decisionsthrough modelling Non-Energy & Material Costs Here we can specify the investment costs and general production costs – note that materials and fuel costs are done separately Investment costs are based on a cost per tonne of clinker, annualised by discounting at a specific rate over its economic lifetime. Interest Rate and Period is specified at Regional level.

13 better decisionsthrough modelling Electricity & Fuel The Fuel requirement is entered for each option Fuel is expressed in two parts: GJ / t clinker; and % Mix. For Existing Kilns which have not been abated, this Mix doesnt change

14 better decisionsthrough modelling Raw Materials & Blending Raw Materials is also expressed in two parts: t material / t clinker; and % Mix Blended Materials are expressed as a % of Cement, excluding Gypsum – the Gypsum % is set elsewhere

15 better decisionsthrough modelling Abatement - Penetration Abatement options can be specified in a lot of detail. In this section on the Capacity sheets, you can define when an abatement starts, how fast it penetrates, and what the maximum share of parc is. Once the data has been set up you can get the system to draw an S-Curve of the parameters that you have entered for an option – this curve is for Energy Efficiency For Abatement options you can control what type of kiln it is applied to (Dry, Wet, Shaft, All) …and whether it can be applied to Existing, New or All capacity

16 better decisionsthrough modelling Abatement - Impact Finally, for each abatement option you can specify what it does to Fuel & Electricity Consumption, and for CCS what the Carbon Storage Rate is Fuel consumption goes down in this case Fuel consumption goes up in this case …but electricity goes down …and CO2 is stored rather than emitted

17 better decisionsthrough modelling Regional Materials Each Region has its own page for materials availability and price

18 better decisionsthrough modelling Fuel & Materials Availability Materials availability can change year-by-year You can set a material to Unlimited Availability by entering -1

19 better decisionsthrough modelling Fuel & Materials Costs Materials costs can change year-by-year

20 better decisionsthrough modelling Fuel & Materials CO2 Emissions For each Region, the CO2 emissions can be set up for each material

21 better decisionsthrough modelling The model so far… We have defined All the capacity details for each Region The Electricity, Fuel and Raw Materials requirements The investment, fixed, and variable costs The abatement options The CO2 emissions from domestic production We can therefore calculate The costs of making cement from existing facilities The costs of introducing new capacity The costs and benefits of the abatement options

22 better decisionsthrough modelling The Cement Production Cost Capacity Region A Demand Increasing cost For each Region, the model works out how much existing clinker capacity it needs to use to meet the demand for cement. If there is insufficient capacity, it will nominally build new capacity until the demand is met. Using the information on costs, the Cement Production Cost (CPC) can be calculated for each facility The facilities are stacked in increasing cost order The most expensive facilities set the starting cement price for trading For each Region, the model considers, one tranche at a time (e.g. 1Mt) 1.How much will it cost to make one extra tranche of cement? 2.How much will it save to reduce production by one tranche? The model has now calculated the marginal cost of production / non- production, and this provides the information needed to consider whether to make this tranche, or to buy it Cement Price

23 better decisionsthrough modelling Potential Trade Quantity (t) Every Region can trade with A. The black line represents the final trade line for importer A, trading with exporters B, C, and D for different tranches. The Trading Position The Trading Position Price $/t A D C B Trade Quantity Trade Price Each import curve is unique for each region, and each export curve is unique for each trading relationship. The import curve is the importers cement price plus gross margin; the export curve is the exporters cement price plus transport costs When there is no more profit to be made by an exporter, trading ceases An import curve (blue) and export curve (red) can be developed from the cost information 0 trade

24 better decisionsthrough modelling The Trading Position The Trading Position C Exports Price Trade Quantity Trade Price B Exports D Exports B Exports Profit from A The exporter decides who it will trade with based on maximising profit Each time a trade occurs, the trading positions have to be re-evaluated 123 Tranche etc A

25 better decisionsthrough modelling The Trade Position: World Trade The Trade Position: World Trade There are multiple trading curves – one for each Region Each export curve (red) is specific to the trading partnership, because the costs are modified to take account of Land and Sea Transport costs which are specific to the trading partnership Each import curve (blue) is specific to the region, as the costs and gross margin are specific

26 better decisionsthrough modelling What about the other data? All the other data in the model is used to modify either: The Cement Production Cost, or The Trading Position This effects World Trade Emissions Profit Trading Partnerships Trade Quotas CO2 Prices Energy Price Inflation Transport Costs Border Taxes Border Carbon Adjustments Carbon Cap Policies

27 better decisionsthrough modelling Model Files Supplied Model folder, e.g. C:\CSIM3-6-0 A Data Manager for each of five scenarios. There are named ERM- CSI_CSIM_xxx_3-6-0.xls, where xxx is a scenario descriptor. Typically, you should only have one file open at a time A Model Engine file ERM-CSI_CSIM_ModelEngine_3-6-0.xla which cannot be edited A Configuration file config.xml which should not be edited Results Template sub-folder e.g. C:\CSIM3-6-0\Results Template A Results Manager Template ERM-CSI_CSIM_ResultsTemplate_3-6-0.xls which should not be edited

28 better decisionsthrough modelling Scenarios Supplied ERM-CSI_CSIM_DATA_NoCommitmentsBaseline_3-6-0.xls ERM-CSI_CSIM_DATA_EUCapsOnly_3-6-0.xls ERM-CSI_CSIM_DATA_Annex1Caps_3-6-0.xls ERM-CSI_CSIM_DATA_SectoralApproach_3-6-0.xls ERM-CSI_CSIM_DATA_GlobalCaps_3-6-0.xls All these files are protected

29 better decisionsthrough modelling Quick Start Open one of the Data Manager files supplied. This will attach the Model Engine and enable the CSIM3 toolbar Change the data as required. Remember to change the name of the Scenario ID in the Scenario Details sheet – the Scenario ID is used as the name of the Results Manager file created Save the Data Manager using a unique file name; you can follow the file naming approach suggested or develop your own Run the model Examine the results in the Results Manager file

30 better decisionsthrough modelling The CSIM3 Toolbar Goto Main Data Menu Returns the user to the Data Menu Run SimulationLaunch the simulation Create S-CurveDisplays S-Curve data parameter data as a graph Goto Results Menu Opens results file for current scenario (if available) Run Batch Run a batch of scenarios (for use with Paragon Information Manager, not supplied) AboutDisplays model version information

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