FRISBEE is a recursive dynamic partial equilibrium model for fossil fuels, electricity and renewable energy sources. The model is global and the supply and demand side is divided into 16 regions, of which Norway is one region. The supply side of each region is divided into four field categories. Thus, the Norwegian continental shelf is divided into the North Sea, the Norwegian Sea, Lofoten-Vesterålen-Senja and the Barents Sea. The time horizon is 50 - 100 years. The Norwegian petroleum tax system is modeled in-depth.
On the oil market OPEC covers the residual demand for a given oil price. Non-OPEC regions take the oil price for given. The markets for gas and coal are perfectly competitive. Oil and gas companies base their investment and production decisions on profitability and detailed knowledge of costs and access to oil and gas resources around the world. The assumption that the investments first go target the most profitable reserves lead to a geographical spread of the oil and gas activity. The model distinguishes between fields in production, undeveloped fields and undiscovered fields. Oil is exported via a common pool. Natural gas is transported between regions through pipelines or as LNG depending on the cost. Production of coal and renewable energy sources are modeled more simply.
Each of the 16 regions demands energy goods depending on population growth, GDP per capita growth, energy prices and energy efficiency. Demand is sluggish, so the model can differ between effects in the short and long run. The model is programmed in GAMS.