PRIMES
Source: Commission modelling inventory and knowledge management system (MIDAS)
Date of Report Generation: Thu Mar 06 2025
Dissemination: Public
© European Union, 2025
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Overview
Acronym
PRIMES
Full title
Price-Induced Market Equilibrium System
Main purpose
Energy system model designed to project the energy demand, supply, prices, trade and emissions for European countries and assess policy impacts.
Summary
The PRIMES (Price-induced market equilibrium system) model is being developed by E3Modelling, a spin-off of the E3MLab at National Technical University of Athens (NTUA). The model is suited for medium-term and long-term (up to 2070) projections in 5-year steps and covers all EU Member States, and EFTA (except Lichtenstein) and candidate countries.
PRIMES combines micro-economic foundations of the behavioural modelling with the engineering and energy-system approach, covering all energy sectors and markets at a disaggregated level. The model determines energy prices, energy supply, energy demand, trade, emissions, costs and investment. Furthermore, the model captures the technology learning and economies of scale.
PRIMES can be used for policy analysis and impact assessment. It provides energy sectors, markets and system projections including energy system restructuring, both in the demand and supply sides. The model can support the impact assessment of specific energy, transport and environment policies and measures applied either at the Member State or EU level, including taxation, subsidies, emissions trading system, technology promoting policies, renewable energy sources policies, efficiency promoting policies, environmental policies and technology standards.
PRIMES can be linked to other models such as GAINS and GLOBIOM for a full coverage of sectors when assessing climate or environmental policies.
Model categories
Energy
Model keywords
emissionsenergy demandenergy supply
Model homepage
Ownership and Licence
Ownership
Third-party ownership (commercial companies, Member States, other organisations, …)
Ownership details
Licence type
Non-Free Software licence
The license has one or more of the following restrictions: it prohibits creation of derivative works; it prohibits commercial use; it obliges to share the licensed or derivative works on the same conditions.
Details
Structure and approach
The PRIMES model (Price-Induced Market Equilibrium System) is a large scale applied energy system model that provides detailed projections of energy demand, supply, prices and investment into the future, covering the entire energy system including emissions. The distinctive feature of PRIMES is the combination of behavioural modelling (following a micro-economic foundation of optimisation by agent or sector) with engineering aspects, covering all energy sectors, and with market equilibrium. The model includes a detailed representation of instruments for policy impact assessment related to energy markets, technology adoption and climate mitigation, including market drivers, standards, and targets by sector or overall. It simulates the EU Emissions Trading System in its current form (changes can be simulated). It handles multiple policy objectives, such as GHG emissions reductions, energy efficiency, and renewable energy targets, and provides pan-European simulation of internal markets for electricity and gas.
PRIMES offer the possibility of handling market distortions, barriers to rational decisions, behaviours and market coordination issues and it performs a full accounting of costs (CAPEX and OPEX) and investment in equipment, energy savings and infrastructure. The model covers the horizon up to 2070 in 5-year interval periods and includes all Member States of the EU individually, as well as neighbouring and candidate countries in Europe. PRIMES is designed to analyse complex interactions within the energy system in a multiple agent – multiple markets framework.
Decisions by agents are formulated based on microeconomic foundation (utility maximization, cost minimization influenced by market equilibrium) embedding engineering constraints and explicit representation of technologies and capital vintages; optionally perfect or imperfect foresight for the modelling of investment applies in all sectors. The model allows simulating long-term transformations/transitions and includes non-linear formulation of potentials by type (resources, sites, acceptability etc.) and technology learning.
The PRIMES model is modular and consists of several sub-models (modules), each one representing the behaviour of a specific agent, a demander or supplier of energy. Sub-models link with each other through a model integration algorithm, which determines equilibrium prices in multiple markets and equilibrium volumes, including cap and trade systems (e.g. ETS), which satisfy balancing and policy, e.g. emissions, constraints and policy targets.
Demand modules formulate a representative agent who maximises benefits (profit, utility, etc.) from the energy demand and non-energy inputs (commodities, production factors) subject to prices, budget and other constraints. Constraints relate to activity, comfort, equipment, technology, environment or the fuel availability. In the demand sub-models, the agents may be simultaneously self-producers of energy services (e.g. using a private car, heating using a residential boiler, etc.) and purchasers of marketed energy commodities. The pricing of self-supplied energy services is endogenous and reflects average total costs. The mix of self- supply and the purchasing from external suppliers (e.g. private cars versus public transportation, residential boiler versus district heating) derives from agent’s optimisation, which depends on market conditions where the agents are price-takers.
Supply modules formulate stylised companies aiming at minimising costs (or maximising profits in model variants focusing on market competition) to meet demand subject to constraints related to capacities, fuel availability, environment, system reliability, etc. Supply-side modules determine commodity and infrastructure prices by end-use sector (tariffs) by applying various methodologies by sector as appropriate for recovering costs depending on market conditions and regulations.
Both demand and supply modules are subject to system-wide constraints, mirroring overall targets for example on emissions, renewables, efficiency, import dependency, etc. When binding, constraints convey non-zero shadow prices (dual values) to the demand and supply modules. Hence, the PRIMES model has overall a mixed-complementarity mathematical structure.
Agents are price-takers when being energy demanders and price-makers when being energy suppliers. Optionally, the model can handle non-perfect market competition regimes. The electricity and gas market modules can optionally include explicit companies and apply the Nash-Cournot competition with conjectural variations. Pricing and costing includes taxes, subsidies, levies and charges, congestion fees, tariffs for use of infrastructure etc. Usually, these instruments are exogenous to the model and reflect policy assumptions.
PRIMES follows a descriptive approach concerning factors which influence decisions by private entities, where perceived costs and uncertainty factors play a significant role. Policy measures can reduce uncertainty and decrease perceived costs: such mechanism in the model is often used to simulate policy inducing higher uptake of advanced technology or investment enabling accelerated energy efficiency progress.
The capital formation derives from an economically driven investment and follows a dynamic accounting of equipment technology vintages: equipment invested on a specific date inherits the technical-economic characteristics of the technology vintage corresponding to that date. Capital turnover is dynamic and the model keeps track of capital vintages and their specific technical characteristics. The agent’s investment behaviour consists in building or purchasing new energy equipment to cover new needs, or retrofitting existing equipment or even for replacing prematurely old equipment for economic reasons.
The PRIMES model is fully dynamic and has options regarding future anticipation by agents in decision-making. Usually, PRIMES assumes a perfect foresight over a short time horizon for demand sectors and an imperfect foresight over long time horizon for supply sectors. All economic decisions of agents are dynamic and concern both operation of existing equipment and investment in new equipment, both when equipment is using energy and when it is producing energy.
The PRIMES model also includes a detailed numerical model on biomass supply, namely PRIMES-Biomass, which simulates the economics of supply of biomass and waste for energy purposes through a network of current and future processes. The PRIMES-Biomass model is a key link of communication between the energy system projections obtained by the PRIMES energy system model and the projections on agriculture, forestry and non-CO2 emissions provided by other modelling specialist tools (CAPRI, GLOBIOM/G4M, GAINS).
Computationally, PRIMES solves an EPEC problem (equilibrium problem with equilibrium constraints), which allows prices to be explicitly determined. The overall convergence algorithm simultaneously determines multi-market equilibrium while meeting system-wide constraints.
Input and parametrization
A summary of database sources, in the current version of PRIMES, is provided below:
- Eurostat and EEA: Energy Balance sheets, Energy prices (complemented by other sources, such IEA), macroeconomic and sectoral activity data (PRIMES sectors correspond to NACE 3-digit classification), population data and projections, physical activity data (complemented by other sources), CHP surveys, CO2 emission factors (sectoral and reference approaches) and EU ETS registry for allocating emissions between ETS and non ETS, Process CO2 emisssions
- Technology databases: ODYSSEE-MURE, ICARUS, Eco-design, VGB (power technology costs), TECHPOL – supply sector technologies, NEMS model database, IPPC BAT Technologies
- Power Plant Inventory: ESAP SA and PLATTS
- RES capacities, potential and availability: JRC ENSPRESO, JRC EMHIRES, RES ninja, ECN, DLR and Observer, IRENA
- Network infrastructure: ENTSOE, GIE, other operators
- Other databases: District heating surveys (e.g. from COGEN), buildings and houses statistics and surveys (various sources, including ENTRANZE project, INSPIRE archive, BPIE), JRC-IDEES, update to the EU Building stock Observatory
The model is fully calibrated to match the historical energy balance of the last PRIMES historical year (5-year step modelling: historical points years are 2000, 2005, 2010, 2015, ..) and to capture the more recent evolution since that year.
Main output
The PRIMES model provides, per country represented and for the EU as a whole detailed and comprehensive energy balances of the energy system, related CO2 emissions and detailed economic information associated to the energy system (investments, costs, prices, taxes, ..).
In association with the GAINS model and the GLOBIOM model, it provides comprehensive GHG balances per country represented and for the EU as a whole.
Spatial & Temporal extent
The output has the following spatial-temporal resolution and extent:
Parameter | Description |
---|---|
Spatial extent / country coverage | EU Member states 27 and UKIcelandNorwaySwitzerlandAlbaniaBosnia and HerzegovinaFormer Yugoslav Republic of MacedoniaGeorgiaKosovoMoldovaMontenegroSerbiaUkraineTurkey |
Spatial resolution | National |
Temporal extent | Long-term (more than 15 years) |
Until 2070 | |
Temporal resolution | Multiple years |
5 yearly |
Quality & Transparency
Quality
Model uncertainties
Models are by definition affected by uncertainties (in input data, input parameters, scenario definitions, etc.). Have the model uncertainties been quantified? Are uncertainties accounted for in your simulations?
- response
- yes
- details
- Uncertainties on assumptions can be addressed by producing variants with the model.
- url
Sensitivity analysis
Sensitivity analysis helps identifying the uncertain inputs mostly responsible for the uncertainty in the model responses. Has the model undergone sensitivity analysis?
- response
- yes
- details
- Sensitivity analysis can be produced with the model.
- url
Have model results been published in peer-reviewed articles?
- response
- yes
- details
- The model has undergone a peer review. See Commission staff working paper: SEC(2011)1569. Results and model developments are regularly published in peer-reviewed journals. The model has been used in multiple peer reviewed publications.
- url
Has the model formally undergone scientific review by a panel of international experts?
Please note that this does not refer to the cases when model results were validated by stakeholders.
- response
- yes
- details
- url
Model validation
Has model validation been done? Have model predictions been confronted with observed data (ex-post)?
- response
- not applicable
- details
- The model is calibrated on historical data. The model does not do predictions but comparative scenario analysis based on assumptions.
- url
Transparency
To what extent do input data come from publicly available sources?
This may include sources accessible upon subscription and/or payment
- response
- Based on both publicly available and restricted-access sources
Is the full model database as such available to external users?
Whether or not it implies a specific procedure or a fee
- response
- no
- details
- The input data to the model is not published, but it builds on multiple sources, a large number of which being publicly accessible. The technology input data, as well as other elements are fully publicly available.
- url
Have model results been presented in publicly available reports?
Note this excludes IA reports.
- response
- yes
- details
Have output datasets been made publicly available?
Note this could also imply a specific procedure or a fee.
- response
- yes
- details
- Selected model outputs are made publicly available. Published outputs are defined by the Commission and are project-specific.
- url
Is there any user friendly interface presenting model results that is accessible to the public?
For instance: Dashboard, interactive interfaces...
- response
- no
- details
- url
Has the model been documented in a publicly available dedicated report or a manual?
Note this excludes IA reports.
- response
- yes
- details
- The model documentation is publicly available. The model documentation includes the architecture and logic of the model and its different modules as well as the mathematical formulation. Many peer reviewed journals include mathematical formulations.
Is there a dedicated public website where information about the model is provided?
- response
- yes
- details
- url
Is the model code open-source?
- response
- no
- details
Can the code be accessed upon request?
- response
- no
- details
The model’s policy relevance and intended role in the policy cycle
The model is designed to contribute to the following policy areas
- Climate action
- Energy
- Transport
The model is designed to contribute to the following phases of the policy cycle
- Formulation – such as ex-ante Impact Assessments
The model’s potential
The PRIMES model is designed to provide long-term energy system projections and system restructuring up to 2070, both in demand and supply sides. The model (including its transport module PRIMES-TREMOVE) can support impact assessment of specific energy, climate, transport and environment policies and measures, applied at Member State or EU level, including price signals, such as taxation, subsidies, ETS, as well as technology promoting policies, RES supporting policies, efficiency promoting policies, environmental policies and technology standards. The PRIMES model is sufficiently detailed to represent concrete policy measures in various sectors, including market design options for the EU internal electricity and gas markets. Policy analysis is based on comparative analysis of policy scenarios against a “baseline” projection.
Note: the model contributions indicated in this section focus on the assessment for policy options. In addition, this model is extensively used for the construction of the baseline in the EU Reference Scenario. This is indicated under the ‘additional information’ section for the related impact assessments. To learn more please see the following publications:
EU reference scenario 2016. Energy, transport and GHG emissions: trends to 2050, Luxembourg: Publications Office of the European Union, 2016, https://doi.org/10.2833/9127
EU Reference Scenario 2020. Energy, Transport and GHG Emissions: Trends to 2050, Publications Office, Luxembourg, 2021, https://doi.org/10.2833/35750
Previous use of the model in ex-ante impact assessments of the European Commission
Use of the model in ex-ante impact assessments since July 2017.
2024SWD/2024/63 final
Impact Assessment Report Part 1 Accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions Securing our future Europe's 2040 climate target and path to climate neutrality by 2050 building a sustainable, just and prosperous society
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The GHG pathways are assessed through high-quality sectoral-specific models: the PRIMES and PRIMES-TREMOVE models are the core elements of the modelling framework for energy, transport, and CO2 emission projections.
2023SWD/2023/165 final
Impact Assessment Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/21/EC on compliance with flag State requirements
- Lead by
- MOVE
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline only
- Contribution details
The main model used for developing the baseline scenario for this initiative is the PRIMES-Maritime transport model, a specific sub-module of the PRIMES and PRIMES-TREMOVE models.
2023SWD/2023/148 final
Impact Assessment Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/16/EC on port State control
- Lead by
- MOVE
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline only
- Contribution details
The main model used for developing the baseline scenario for this initiative is the PRIMES-Maritime transport model, a specific sub-module of the PRIMES and PRIMES-TREMOVE models.
2023SWD/2023/145 final
Impact Assessment Accompanying the document Proposal for a Directive of the European Parliament and of the Council amending Directive 2009/18/EC establishing the fundamental principles governing the investigation of accidents in the maritime transport sector
- Lead by
- MOVE
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline only
- Contribution details
The main model used for developing the baseline scenario for this initiative is the PRIMES-Maritime transport model, a specific sub-module of the PRIMES and PRIMES-TREMOVE models.
2023SWD/2023/88 final
Impact Assessment Part 1 Accompanying the document Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Regulation (EU) 2019/1242 as regards strengthening the CO₂ emission performance standards for new heavy-duty vehicles and integrating reporting obligations, and repealing Regulation (EU) 2018/956
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The model helped to assess the following impacts:
- Emission of greenhouse gases
- Energy intensity of the economy
- Fuel mix used in energy production
- Demand for transport
- Vehicle emissions
- Energy and fuel consumption
2022SWD/2022/377 final
Impact Assessment Accompanying the document Proposal for a Regulation of the European Parliament and of the Council establishing a Union certification framework for carbon removals
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
This impact assessment used the results from the model run for impact assessment SWD/2020/176 final regarding '2030 Climate Target Plan'
2021SWD/2021/643 final
Impact assessment accompanying the document Proposal for a regulation of the European Parliament and of the Council: establishing a carbon border adjustment mechanism
- Lead by
- TAXUD
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The model helped to assess the following impacts:
- EU Exports & imports
- Investment flows & trade in services
- Cost of doing business
- Business' capacity to innovate
- Market share & advantages in international context
- Free movement of goods, services, capital and workers
- Competition
- Innovation for productivity/resource efficiency
- Budgetary consequences for public authorities
- Consumer's ability to benefit from the internal market or to access goods and services from outside the EU
- Prices, quality, availability or choice of consumer goods and services
- Impacts on third countries
- Goods traded with developing countries
- Investments and functioning of markets
- Impact on jobs
- Impact on jobs in specific sectors, professions, regions or countries
- Wages, labour costs or wage setting mechanisms
- Emission of greenhouse gases
- Sustainable production and consumption
- Relative prices of environmental friendly and unfriendly products
- Polution by businesses
- Environment in third countries
- Energy intensity of the economy
- Fuel mix used in energy production
- Energy and fuel consumption
2021SWD/2021/631 final
Impact assessment accompanying the Proposal for a Regulation of the European Parliament and of the Council: on the deployment of alternative fuels infrastructure, and repealing Directive 2014/94/EU of the European Parliament and of the Council
- Lead by
- MOVE
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
PRIMES is one of the core models of the modelling framework for energy, transport and greenhouse gas emission projections. The PRIMES-TREMOVE model, a module of PRIMES, provided the developments in the vehicle fleet and the associated recharging and refuelling infrastructure, as well as the developments in CO2 emissions and air pollution emissions. The PRIMES model ensured the links with the rest of the energy system in developing the baseline and the policy scenarios. Supporting study: Ricardo et al. (2021), Impact assessment support study on the revision of the Directive on the Deployment of Alternative Fuels Infrastructure (2014/94/EC) (for details, see the impact assessment report).
2021SWD/2021/633 final
Impact assessment accompanying the Proposal for a Regulation of the European Parliament and of the Council: on ensuring a level playing field for sustainable air transport
- Lead by
- MOVE
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options (indirect)
- Contribution details
- Documented in study :
PRIMES is one of the core models of the modelling framework for energy, transport and greenhouse gas emission projections. The PRIMES-TREMOVE model, a module of PRIMES, provided the developments in the air transport activity, the energy use in the aviation sector, the greenhouse gas emissions and air pollution emissions, as well as the associated costs. The PRIMES model also provided an assessment of the biomass feedstock and the electricity consumption for producing synthetic fuels, while ensuring the links with the rest of the energy system
2021SWD/2021/623 final
Impact assessment accompanying the Proposal for a Directive of the European Parliament and of the Council: on energy efficiency (recast)
- Lead by
- ENER
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The model helped to assess the following impacts:
- Investment cycle
- Markets for Innovation
- Innovation for productivity/resource efficiency
- Investments and functioning of markets
- Emission of greenhouse gases
- Energy intensity of the economy
- Fuel mix used in energy production
- Energy and fuel consumption
2021SWD/2021/621 final
Impact assessment accompanying the Proposal for a Directive of the European Parliament and the Council: amending Directive (EU) 2018/2001 of the European Parliament and of the Council, Regulation (EU) 2018/1999 of the European Parliament and of the Council and Directive 98/70/EC of the European Parliament and of the Council as regards the promotion of energy from renewable sources, and repealing Council Directive (EU) 2015/652
- Lead by
- ENER
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The model helped to assess the following impacts:
- Economic growth and employment
- Investments and functioning of markets
- Impact on jobs
- Impact on jobs in specific sectors, professions, regions or countries
- Households income and at risk of poverty rates
- Emission of greenhouse gases
- Economic incentives set up by market based mechanisms
- Emission of ozone-depleting substances
- Ability to adapt to climate change
- Energy intensity of the economy
- Fuel mix used in energy production
- Demand for transport
- Vehicle emissions
- Energy and fuel consumption
- Change in land use
2021SWD/2021/635 final
Impact assessment accompanying the Proposal for a Regulation of the European Parliament and of the Council: on the use of renewable and low-carbon fuels in maritime transport
- Lead by
- MOVE
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
PRIMES is one of the core models of the modelling framework for energy, transport and greenhouse gas emissions projections. PRIMES-Maritime, a module of PRIMES and PRIMES-TREMOVE transport model, provided the developments in the maritime transport activity, energy use in the maritime sector, the greenhouse gas emissions and air pollution emissions, as well as the associated costs. The PRIMES model also provided an assessment of the biomass feedstock and the electricity consumption for producing synthetic fuels, while ensuring the links with the rest of the energy system.
2021SWD/2021/601 final
Impact assessment accompanying the document Directive of the European Parliament and of the Council: amending Directive 2003/87/EC establishing a system for greenhouse gas emission allowance trading within the Union, Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and Regulation (EU) 2015/757
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
(1) General modelling of ETS strengthening and possible extension to buildings and transport/ all fossil fuel combustion. (2) Extension of emissions trading to maritime transport and alternatives. The PRIMES-Maritime module has been used to assess the impact of the various maritime policy options. PRIMES-Maritime is a specific sub-module of the PRIMES-TREMOVE transport and the overall PRIMES energy systems model aiming to enhance the representation of the maritime sector within the energy- economy-environment modelling nexus.
2021SWD/2021/613 final
Impact assessment accompanying the document Proposal for a Regulation of the European Parliament and of the Council: amending Regulation (EU) 2019/631 as regards strengthening the CO2 emission performance standards for new passenger cars and new light commercial vehicles in line with the Union's increased climate ambition
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The PRIMES model is used to assess the projected evolution of the transport system, as part of the wider energy system, resulting from different policies, including CO2 emission standards for vehicles.
2021SWD/2021/611 final
Impact assessment accompanying the document Proposal for a regulation of the European Parliament and of the Council: amending Regulation (EU) 2018/842 on binding annual greenhouse gas emission reductions by Member States from 2021 to 2030 contributing to climate action to meet commitments under the Paris Agreement
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The PRIMES model and its variants are used to model all aspects of the energy system, including buildings, transport and industry. Regarding greenhouse gas emissions it reports all CO2 emissions from these sectors.
2020SWD/2020/176 final
Impact Assessment accompanying the document Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions: Stepping up Europe’s 2030 climate ambition Investing in a climate-neutral future for the benefit of our people
- Lead by
- CLIMA
- Run by
- E3Modelling: Energy - Economy - Environment
- Contribution role
- baseline and assessment of policy options
- Contribution details
The PRIMES model and its variants are used to model all aspects of the energy system, including buildings, transport and industry. Regarding greenhouse gas emissions it reports all CO2 emissions from these sectors.