Rebuilding the Coal Model in the Energy Information Administration's National Energy Modeling System

Abstract

The Energy Information Administration uses the National Energy Modeling System (NEMS) to forecast prices and quantities in energy markets. The coal model that the Energy Information Administration first used in NEMS contributed to convergence problems in NEMS because of its design. Furthermore, because the coal model could not be modified efficiently to incorporate the new sulfur dioxide market created by the Clean Air Act Amendments of 1990, we had to build a new model. Building the new model also allowed us to incorporate improved knowledge about coal resources and other aspects of coal markets, further improving the quality of the forecasts.