Many of our clients – especially in government or non-profit organizations – work within a tight budget. It’s understandable, then, that cost is one of their biggest concerns as they seek to have their questions answered.
Once a client or prospective client understands what the NEMS model can and cannot do, the next question is often “How much does a model run cost?” A “run” usually refers to running the model for a particular scenario or using the model as a basis for analysis to answer a question.
The National Energy Modeling System (NEMS) model is a complex integrated energy model that can provide a wealth of information and insights about the future of U.S. energy production, pricing, conversion, consumption, and imports, as well as the role of market conditions, policies, technologies, and individual decision-makers. But an analyst cannot simply input a set of assumptions, press a button, and get a useful answer to a question from the model. There are several different factors involved and these factors drive the cost of the analysis.
3 Factors That Drive the Cost of a NEMS Model Run
1. The number of model assumption changes needed
All NEMS model runs are not the same. The model is based on a number of different assumptions (economic factors, world energy markets, availability of resources, technology characteristics, and so on). To answer some questions, it is only necessary to change one or a few of these assumptions. For more complex questions, it is often necessary to change many of these assumptions and run multiple scenarios.
Changing a large number of assumptions before running the model requires more thought and effort than simpler runs. We may recommend implementing these assumptions in a step-wise fashion over multiple runs to gain a better sense of the impact of each of the assumptions on the overall results. In addition, after we run the model, we will review the results to ensure the new assumptions worked within the model as expected and then interpret and summarize the results for use by the client. All of this extra work and time will result in additional costs but are necessary to ensure a useful outcome.
2. The amount of interpretation required
The NEMS model is a lot of things, but it is not user friendly. Our team of experts has many years of experience setting up the model, running it, and interpreting the results. Some of our long-term clients have a good understanding of the model’s structure and capabilities, but they may want to delve deep into the results to better understand the underlying causes of the scenario results. Other clients that are new to the model will require more analysis and explanation to help them understand how the model works, how to design appropriate scenarios, and how to make sense of the results.
3. Customization of the model
There are certain common energy scenarios for which the model has been used for many years. These scenarios are where NEMS really shines without much tweaking. Examples of these common scenarios include changing the cost of a single technology, extending the deadline of an existing policy, or changing the amount of available natural gas resources.
Some client questions—for example, the potential impact of a new energy policy or technology—may require modification of the model to ensure that the model is capable of answering their specific questions. Our team of experts is well qualified to create a modeling plan and customize the model to meet the client’s needs. However, due to the complexity of the model structure, the amount of work required to customize the NEMS model is a significant driver of the cost of these services.