On October 20 and 21, PESD Associate Director Mark Thurber led a class of 30 California Public Utilities Commission staff in a deep dive into the functioning and benefits of day-ahead markets, which are financial markets that run a day ahead of actual electricity delivery so the market operator can better optimize energy dispatch. This workshop concluded a broader initiative in which the Program on Energy and Sustainable Development delivered a series of five courses to staff across the CPUC.

Regulators in California and across the West face the challenge of how to keep electricity affordable and reliable as intermittent wind and solar take over a major share of supply and demand swells with the needs of data centers. Stanford Impact Labs is helping PESD equip regulators — including through e-learning and game-based workshops like this one — with the best academic knowledge on how to deploy day-ahead markets and other mechanisms to achieve these goals.

In this two-day workshop in San Francisco, participants from the CPUC played the roles of generating companies in the Energy Market Game to explore the potential benefits of day-ahead markets. The first sessions demonstrated how day-ahead markets create powerful and flexible incentives for generators to have units available when needed in the real-time market. Participants also learned through the gameplay how day-ahead markets facilitate renewable energy integration by incentivizing better wind and solar forecasting. In one game, the two teams that won a lottery for “improved forecasting technology” were able to put that advantage to use by scheduling their wind and solar units more accurately in the day-ahead market, reaping the financial benefit in the real-time market and helping the overall electricity market work more efficiently in the process!

As in other recent workshops, participants completed a set of PESD’s e-learning modules in advance of the in-person sessions so they would all bring a base understanding of key energy market concepts to the gameplay. This group of participants was the first to complete the newly released “Day-Ahead Markets” e-learning module. This module, the seventh in PESD’s suite of e-learning content, introduces participants to the principles and rationale behind day-ahead markets.

The Day-Ahead Markets module opens with a visit to the familiar offices of the ACME generating company, which faces a new, seemingly insoluble problem. For a plant with high startup costs, how can ACME’s beleaguered CEO know when she will turn a profit by powering on, and when it would be better to idle the plant instead because it won’t end up running enough hours to cover its startup costs? Module users run through a series of interactive scenarios to learn how day-ahead markets can help alleviate this problem (and more!), reassuring our trusty cartoon policymakers and generators about the value and viability of day-ahead markets along the way.

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CPUC staff who completed all of the required e-learning modules and competed vigorously in the in-person games were awarded a certificate of completion. We were excited to hand out 26 certificates in all!

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A big thank you to our friends at the CPUC for hosting us for this series of workshops! We always enjoy working together and value your insightful feedback and generous support.