>>What is your suggestion how should I develop RES policy mechanisms within my LEAP model. Could I define, for example, feed-in tariffs as Fuel Costs for different energy sources (section Transformation), as this is the cost Government needs to pay in order to sell Electricity from these sources?

My understanding is that feed-in tariffs are usually implemented as a guaranteed subsidized price for renewable energy being sold to the grid. One way to model that in LEAP would be implement a negative fuel price for RE processes that generate electricity from renewables (which normally have zero fuel prices). This would tend to make LEAP and NEMO's optimization calculations favor such processes and thus more would be generated from them. Unfortunately, LEAP and NEMO do not support negative fuel prices right now. I will look into adding such a capability for a future version. We'll need to check that a negative fuel price does not cause strange behavior in NEMO's optimization calculations.

When modeling FITs, it is also worth noting that some may come from utility-scale generation and some from households/businesses selling excess solar back to the grid. In the latter case, some of the electricity generated goes directly to meet household demands (and so can be assumed to avoid T&D losses), while the rest of it can be assumed to be fed out onto the grid. In these situations it would be best to account for the differing T&D loss levels in each situation and that is probably best done with a series of different Transformation modules: one for local generation and one for centralized generation. At the moment, LEAP only supports optimization calculations in a single module, but its worth noting that we are working on an update to LEAP that will support energy system optimization across all Transformation modules. I hope that will be ready later this year.

One other point to note regarding modeling of RE. When using optimization modeling in LEAP you can also specify targets for renewable generation in a way that mimics the implementation of Renewable Portfolio Standards (RPS) and you can also look at the role storage can play in complementing higher RE penetration.

I hope this helps.

Charlie