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International Futures Help System

Energy Equations Trade

Energy export capacity (ENXC) is a moving average portion (XKAVE) of total energy production.

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The energy import demand (ENMD) is a moving average portion (MKAVE) of demand (ENDEM).

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Because of the frequent use and importance of government trade restrictions in energy trade, model users may want to establish export or import limits (ENTL) exogenously in the determination of basic energy exports (BENX) or imports (BENL).

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World energy export capacity (WEXC) and import demand (WEMD) are simply sums across regions.

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These will always be somewhat different. Actual world energy trade (WET) is taken as the average of the two.

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Actual energy exports (ENX) or imports (ENM) will thus need to be adjusted relative to capacity or demand. This adjustment normalizes exports and imports to the total of global energy trade.

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IFs can now update the moving average export (XKAVE) and import (MKAVE) propensities for the next time step. This requires historic weights for exports (XHW) and imports (MHW).

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In an earlier version of the model, the computation of export capacity and import demand included a price sensitive term, in which local prices and global prices were compared. We moved to this simpler form at the same time that we enhanced energy prices and investment, making the first responsive to regionally-specific capital costs of energy and making the second responsive to regionally-specific profits in the energy sector. These changes are key to the dynamics of the energy module and determine the regional contributions to the global energy market. Trade simply clears that market.