The power market model TheMA and modules

FlowmapTHEMA’s power market model, TheMA, is an advanced, fundamental power market model of European markets. The model is actively developed by THEMA Consulting Group and has been applied for a variety of purposes including the preparation of price forecasts, scenario analysis and investment evaluations. A wide range of energy market actors license the model for direct use and the model’s userbase includes public authorities, energy utilities, portfolio managers and funds. The model is constantly updated, maintained and improved in close collaboration with these licensees.

Key features

Fundamental power market model: The model can be used for both short- and long-term power market analysis. It is designed to equate supply and demand, identifying the relevant clearing price on the basis of the marginal costs of the marginal generator (or equivalently, the willingness to pay of the marginal consumer). In doing so, it accounts for start-up and ramping costs, as well as other intertemporal restrictions relevant to generation costs.

  • Full hourly resolution: The model has full, sequential hourly time resolution. In addition, the model user can easily customise the time resolution.
  • Detailed modelling of thermal plant: Among other things, the model accounts for start-up and shut-down costs, part-load efficiency and minimum-load restrictions.
  • Detailed modelling of hydropower: The model assesses the implicit water value of plants based on their reservoir and installed generation capacity, as well as their inflow and inflow profiles.
  • Variable renewable generation: Variable renewable generation like wind and solar is modelled using historically observed volatility. Just like thermal and hydropower plants, large wind farms and PV installations can be individually modelled using their own production profiles and characteristics.
  • Demand: A stepwise linear demand function can be applied and demand can be split into different components for each country, each with its own consumption profile. End-use tariffs can also be modelled to estimate their effect on consumer behaviour (notably modelling so-called prosumers).
  • Batteries: Batteries are modelled to account for their losses, storage, charging and discharging characteristics.
  • Trade: Cross-zonal flows can be optimised (based on the price spread), or be defined by the user (for example to model contracted trades). Interconnector capacities can be set on an hourly basis and the model can be set up to simulate trade using either Net Transfer Capacities (NTCs) or Flow-Based Market Coupling (FBMC).

What you get

  • User-friendly model: The TheMA power market model is implemented in GAMS and can therefore be run using commercial solvers like CPLEX or GUROBI. Crucially, it has an Excel-based interface for both inputs and outputs. Alternatively, if the user wishes, the model can be linked to databases or import csv files directly. Overall, TheMA is exceptionally user-friendly and flexible, and can therefore be easily customised to meet your individual needs (for example, the modelling of your own power plants).
  • Complete database: The model license is delivered with a complete database covering all major European markets for the period to 2045.
  • Full access: Users are provided with full access to all the relevant data and to the source code itself. The model, the code and the data used is all transparently available – there’s no ‘black box’.
  • R-based output tool: To get a handle on the enormous quantity of data generated (for example, the hourly value of generation over a range of years and scenarios for all of the modelled power plants), we’ve developed an R-based tool that allows you to easily visualise and analyse the results.
  • Introductory workshop and ongoing support: We help customers to get the model up and running and present both the model and how to use it in a personalised introductory workshop. The license also includes a number of hours of ongoing support.
  • Updates: The power market model is continually updated and developed based on customer requests. An updated version is delivered to clients annually.
  • Model forum: All users meet annually at our modelling forum to share their experiences and decide on the future development programme.
  • Benchmarking: The model is continually benchmarked against both historical and forward prices.

Other model variants

In addition to the standard version of the TheMA model, we have developed a range of variants and modules for different uses.

TheMA Reserve

This variant solves both the spot and balancing markets simultaneously and can be used, for example, to simulate the market for secondary reserves. In doing so, it takes account of specific market features like the bid-block structure, the symmetry or asymmetry of bidding, and different activation remuneration schemes, among other things.

TheMA Grid

This model simulates production patterns and physical power flows in the meshed AC network at a nodal level. As a result, it can be used to identify grid bottlenecks within or across price zones, and to estimate the Power Transfer Distribution Factors (PTDFs) relevant to the modelling of flow-based market coupling (see TheMA Flow Based below).

TheMA Flow Based

The standard TheMA model uses a Net Transfer Capacity (NTC) approach to model cross-zonal exchanges, the same approach currently used in the North European power market. In the flow-based variant, we instead simulate Flow Based Market Coupling, as currently applied in Central Western Europe. We also offer tailored flow-based models to our clients, which can be applied to short-term trading.

TheMA Investment and Carbon

Whereas capacity additions and decommissioning are exogenously given (i.e. set directly by the user) in the standard version of the model, in the investment module, capacity additions and decommissioning are simulated directly by the model based on long-run marginal cost assumptions for different technologies. The carbon market module is an extension of the investment module and allows the carbon and power markets to be simulated in tandem. In it, the carbon market is simulated directly based on assumptions about the overall emissions cap, the Market Stability Reserve mechanism, and emissions and abatement costs for sectors other than power. Fuel switching, for example from coal to gas, or the transition from fossil-fuel to renewable generation technologies is handled endogenously by the model, which estimates directly the future carbon price.


The model is actively used by a broad client base in Europe which includes large utilities, trading houses, authorities, and other stakeholders. It is used for both for long- and short-term price forecasting in European power markets and in markets around the world.

Please contact us for detailed references.


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Arndt von Schemde Partner and CEO, PhD
+47 982 63 986

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