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Economic Models

Sometimes clients face specific sector issues or have particular economic and financial modelling problems. Our model development expertise allows us to build bespoke and purposeful models which provide our clients with powerful, robust insights and analysis.

We have a model design philosophy that we apply systematically, for greater success

With experience across a range of modelling and coding platforms, our experienced analytics team can develop and build a broad range of economic and financial models, from customised, stand-alone Excel models right up to centralised, client-server, integrated modelling systems that can be used by dozens of people simultaneously anywhere in the world.

Our tools are robust and integrated from front to back end, avoiding messy add-ons and retro fitted features and work-arounds.

Over more than two decades, Frontier Economics has refined a design philosophy and approach to development that ensures that our tools are:

  • purposeful and meet all functional requirements, efficiently and effectively
  • user-friendly, easy to use and intuitive
  • developed in collaboration with our clients
  • delivered on time and on budget.

Our experience in developing built-for-purpose and bespoke economic and financial models has helped our public and private sector clients prosper across a range of industries.

Our approach is user focused

We work with our client to understand the ‘look and feel’ of the model, and identify the key features that model users will require to ensure the model meets our clients’ needs, no matter how refined. We combine these needs with our extensive experience to ensure that our clients receive the right modelling tools, and are able to use them to support their decision making.

Some of our economic models include:

 

Our latest model - Energy42 - is an integrated Electricity, Gas and Hydrogen Investment Model which co-optimises investment and dispatch in production, storage and transmission across each sector, simultaneously.

Leveraging 20+ years of energy sector modelling experience, Energy42 helps make complex investment decisions across Electricity, Gas and Hydrogen sectors. By optimising simultaneously across these sectors, rather than sequentially, Energy42 provides a powerful tool to model the real-time interactions between electricity, gas and hydrogen production and storages. It can model scenarios to find the optimal investment outputs, revenues and prices – results which can then be used to inform future policy and investment decisions.

Energy42 Diagram - showing the interrelation between Hydrogen, Electricity and Natural Gas

Learn more about Energy42

Australian Carbon Credit Units (ACCUs) are a tradable financial product. They incentivise carbon abatement activities through projects ranging from reforestation to energy efficiency. One ACCU represents one tonne of carbon dioxide equivalent (tCO2-e) that would have otherwise been released into the atmosphere.

Frontier Economics' Australian Carbon Credit Unit (ACCU)/Safeguard Mechanism market model allows us to forecast ACCU prices to 2050. The granular, bottom-up, model forecasts ACCU prices by interacting voluntary and compliance demand for ACCUs with Marginal Abatement Cost (MACC) curves across time.

Our proprietary model can run different scenarios, provide maximum and minimum ACCU prices for sensitivity analysis, and can identify different sources of abatement supporting the ACCU market.

Examples of how our clients have used our ACCU/Safeguard Mechanism model include:

  • Investment analysis for the adoption of in low-emission technologies,
  • Internal carbon pricing strategies to map out a credible decarbonisation pathways, and
  • Analysis of the financial viability of supplying ACCUs into the market, including the potential to capitalise on environmental and social co-benefits.

The ACCU/Safeguard Mechanism model is based on Frontier Economics’ extensive experience in carbon market design, emissions modelling, industry knowledge across energy, transport, waste, land use, and resources, and collaboration with leading academic experts.

 

Our expertise in Economic Models

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