Demands and Prices

Fuel price trajectories, demand projections, and policy assumptions

VerveStacks incorporates comprehensive demand forecasting and fuel price trajectories from global scenario datasets to create realistic economic foundations for energy system modeling.

Core Philosophy

Economic Realism Through Global Integration

VerveStacks embeds economic signals directly from peer-reviewed global scenarios, ensuring that country-specific models reflect realistic price trajectories and demand evolution patterns. This approach provides quantitative foundations for technology deployment economics, fossil fuel phase-out pathways, and renewable energy investment drivers.

Scenario-Driven Differentiation

Rather than using static assumptions, VerveStacks leverages scenario-based trajectories that capture the economic dynamics of different climate and policy pathways. This enables robust analysis of technology transitions under varying economic conditions.

Fuel Price Integration

AR6 Scenarios Foundation

Base year fuel price assumptions

VerveStacks incorporates country-specific fuel price assumptions based on regional market conditions, transportation costs, and infrastructure constraints:

**Representative Fuel Price Ranges by Country (USD/MWh thermal)**
iso	gas_low	gas_high	coal_low	coal_high	oil_low	oil_high	bioenergy_low	bioenergy_high
USA	10.3	13.7	11.5	14.5	45	55	18	26
CHN	17.1	24.0	9.1	12.2	48	58	20	28
DEU	29.1	41.1	13.7	16.7	48	58	24	32
JPN	34.2	47.9	18.3	22.9	48	58	28	36
IND	30.9	41.1	8.6	11.0	45	55	15	22
GBR	27.4	39.4	13.7	16.7	48	58	26	34
FRA	29.1	41.1	13.7	16.7	48	58	24	32
ITA	29.1	41.1	15.2	18.3	50	60	25	33

Note: Prices represent delivered cost to power plants including transportation. Ranges reflect seasonal variations, contract vs spot pricing, and peak/off-peak periods.

Key Data Sources:

U.S. Energy Information Administration (EIA): Henry Hub natural gas spot prices, Central Appalachian coal prices, Short-Term Energy Outlook (August 2025), wood pellet prices
International Energy Agency (IEA): Energy Prices Database, Gas Market Report Q3-2025
European Commission: Weekly Oil Bulletin, EU Energy Markets Observatory
CME Group/NYMEX: Natural gas futures (Henry Hub), coal futures (Central Appalachian)
ICE: TTF gas futures, API2 coal futures, Brent crude futures
Argus Media: Global LNG prices, Asian spot LNG (JKM), coal price assessments, biomass pellet indices
S&P Global Platts: Regional gas hubs, coal markers, oil product prices

Regional Price Benchmarks (2025 Averages):

Natural Gas: Henry Hub $2.50-4.20/MMBtu; TTF €25-35/MWh; JKM $10-14/MMBtu
Coal: Central Appalachian $70-80/ton; API2 (ARA) $90-110/ton; Newcastle $120-150/ton
Oil: Brent $75-85/barrel; WTI $70-80/barrel
Biomass: US pellets $180-230/ton; EU pellets €180-250/ton; Asian pellets $150-200/ton; Agricultural residues $40-80/ton

Global fuel price trajectories by scenario - Regional price adjustments based on IPCC AR6 Working Group III scenarios - Transportation and distribution cost modeling - Tax and subsidy adjustment mechanisms

Carbon Pricing Implementation

Carbon pricing trajectories from IPCC AR6 climate scenarios

VerveStacks incorporates carbon pricing trajectories extracted from IPCC AR6 Working Group III vetted scenarios, providing quantitative foundations for energy system modeling across 5 climate categories, 11 global regions, and the critical 2020-2050 transition period.

Data Source and Methodology

Source: IPCC AR6 Working Group III Scenarios Database R10 regions v1.1
Quality Control: Chapter 3 vetted scenarios only (peer-reviewed model-scenario combinations)
Variable: Price|Carbon (economy-wide carbon pricing)
Currency: All values in constant 2015 US Dollars (USD2015) per IPCC AR6 conventions
Outlier Treatment: Conservative IQR-based removal (2.5×IQR threshold) applied surgically by Category-Region-Year groups
Coverage: 385 data points across 5 climate categories and 11 R10 regions

Climate Categories and Price Ranges

The carbon price trajectories show clear hierarchical ordering reflecting economic effort required for different climate targets:

2050 Median CO2 Prices by Climate Category
Category	Description	Climate Target	2050 Price (USD2015/tCO2)
C1	Limit warming to 1.5°C (>50%) with no/limited overshoot	Most Ambitious	$592
C2	Limit warming to 1.5°C (>67%) with high overshoot	High Ambition	$289
C3	Limit warming to 2°C (>67%) with higher action post-2030	Moderate-High	$210
C4	Limit warming to 2°C (>50%) with immediate action	Moderate	$112
C7	Likely above 3°C warming with limited mitigation	Minimal Action	$0

Temporal Evolution Patterns

All ambitious scenarios (C1-C4) show rapid price acceleration post-2025:

Global Average CO2 Prices by Year (USD2015/tCO2)
Year	C1	C2	C3	C4	C7
2020	$3	$0	$3	$1	$0
2025	$151	$29	$40	$14	$0
2030	$214	$51	$60	$27	$0
2040	$362	$173	$131	$75	$0
2050	$592	$289	$210	$112	$0

Regional Price Differentiation

For the most ambitious scenarios (C1), regional median prices in 2050 range from $526-644/tCO2:

Developed Regions (highest carbon prices):

North America: $644/tCO2
Europe: $635/tCO2
Pacific OECD: $604/tCO2

Emerging Economies (moderate carbon prices):

Africa: $605/tCO2
India+: $592/tCO2
China+: $582/tCO2

Other Regions (lower carbon prices):

Latin America, Middle East, Rest of Asia: ~$582/tCO2
Reforming Economies: $578/tCO2
Rest of World: $526/tCO2

Demand Projection Framework

Energy Demand Evolution

VerveStacks integrates demand projections that reflect: - Economic growth trajectories aligned with scenario assumptions - Sectoral demand evolution (residential, commercial, industrial, transport) - Efficiency improvement pathways - Electrification trends across sectors

Note

All carbon pricing trajectories and fuel price assumptions are derived from peer-reviewed IPCC AR6 scenarios with full methodological transparency and reproducibility.