How are Short-Run Marginal Costs (SRMC) Calculated in Montel Online?

Short-run marginal costs (SRMC) refers to the cost associated with using gas or coal to produce power. More specifically, it is a calculation of the short-term production cost per produced MW per type of fuel (gas or coal).

Where can SRMC be viewed in Montel Online?

In Montel Online, navigate to "Power"->"SRMC" to view the "SRMC" page. 

1. On the "SRMC" page, click the "Change parameter values" bar to view and edit the values used in calculating SRMC. 

2. The "SRMC and power prices, currency/MWh" chart shows a graph of historical and/or forward SRMC values. Different contract periods, gas or coal sources, and power sources can be selected in the drop-down menus at the top of the chart. 

A table of SRMC calculations for a specific market area can also be viewed in the "Power"->market area->"Overview pages" in Montel Online (the image below shows the table in the power "Germany Overview" page).

How is SRMC calculated?

The SRCM calculation is based on the following formula:

SRMC =  (Price /EfficiencyFactor) + ManagementCost + ((CO2Price * EmissionFactor) / EfficiencyFactor)

Note that the "Price", "EfficiencyFactor", and "EmissionFactor" refers to those related to either gas or coal (e.g., for calculation of gas SRMC, "Price" is the price of the gas product used in the calculation). 

The resulting SRMC value can be multiplied by a currency conversion value if the currency of the gas/coal product is not Euro. 

For example, calculating gas SRMC with gas Price = 45.347, EfficiencyFactor = 0.53, ManagementCost = 2.5,  CO2Price = 109.8, and EmissionFactor =  0.187 can be done the following way:

SRMC =  (45.347 /0.53) + 2.5 + ((109.8 * 0.187) / 0.53) = 126.8011321

In this case, the gas SRMC, i.e., the cost of using gas to produce 1 MW of power, is 126.8 euros.