A Nonlinear Complementarity Approach for the NationalEnergy Modeling

The National Energy Modeling System (NEMS) is a large-scale mathematical model that computes equilibrium fuel prices and quantities in the U.S. energy sector. At present, to generate these equilibrium values, NEMS sequentially solves a collection of linear programs and nonlinear equations. The NEMS solution procedure then incorporates the solutions of these linear programs and nonlinear equations in a nonlinear Gauss-Seidel approach. We describe how the current version of NEMS can be formulated as a particular nonlinear complementarity problem (NCP), thereby possibly avoiding current convergence problems. In addition, we show that the NCP format is equally valid for a more general form of NEMS. We also describe several promising approaches for solving the NCP form of NEMS based on recent Newton type methods for general NCPs. These approaches share the feature of needing to solve their direction-nding subproblems only approximately. Hence, they can eeectively exploit the sparsity inherent in the NEMS NCP.