North American Coal Model
Just as with gas and electricity, there is no such thing as an isolated coal market. The steam coal market in North America is fully interconnected from coast to coast, border to border, by rail, water, truck, and other transportation systems. Deloitte MarketPoint’s North American Coal Model is designed to simulate how regional interactions among mining, supply, transportation, and consumers determine market clearing prices, coal reserves, flowing volumes, and inventories throughout the North American coal market.
The North American coal database combines fundamental information about each basin with engineering data on North America’s coal transportation infrastructure. The model distinguishes the various producing regions and enumerates every known coal mine. It includes information on the unique aspects of each mine based on historical information – like the differences in heat content (Btu per pound), mercury content, sulfur content, and ash found in coal produced by each mine. The model also supports a sophisticated hub-and-spoke coal transportation network (rail, barge, truck, import terminal) and coal blending prior to consumption. On the demand side, the coal model uses a concept of coal conversion to analyze how consumers use coal – for example, conventional power generation (coal to electricity) or coal gasification (coal to methane).
The Electricity and Emissions Models extend the analysis of the coal industry to account for the effect of cap-and-trade and certain other environmental regulations. An integrated model is necessary because the primary consumer of coal in the world is the electric power generation sector. When the coal model is combined with these other models, the result is a broad analysis of the effects of proposed and existing environmental regulations on market behavior.
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