This report documents the objectives, analytical approach, and design of the National Energy Modeling System (NEMS) Renewable Fuels Module (RFM) as it relates to the production of the Annual Energy Outlook 1998 (AEO98) forecasts. The report catalogues and describes modeling assumptions, computational methodologies, data inputs, and parameter estimation techniques. A number of offline analyses used in lieu of RFM modeling components are also described. For AEO98, the RFM was modified in three principal ways, introducing capital cost elasticities of supply for new renewable energy technologies, modifying biomass supply curves, and revising assumptions for use of landfill gas from municipal solid waste (MSW). In addition, the RFM was modified in general to accommodate projections beyond 2015 through 2020. Two supply elasticities were introduced, the first reflecting short-term (annual) cost increases from manufacturing, siting, and installation bottlenecks incurred under conditions of rapid growth, and the second reflecting longer term natural resource, transmission and distribution upgrade, and market limitations increasing costs as more and more of the overall resource is used. Biomass supply curves were also modified, basing forest products supplies on production rather than on inventory, and expanding energy crop estimates to include states west of the Mississippi River using information developed by the Oak Ridge National Laboratory. Finally, for MSW, several assumptions for the use of landfill gas were revised and extended.
