Energy Market Game
PESD has developed a web-based game that allows players to take on the roles of electricity generating companies (“gencos”), electricity retailers, or vertically-integrated utilities in electricity markets with different market rules. The Energy Market Game allows players to explore key concepts and market mechanisms, like how forward contracts change the incentives for gencos to exercise unilateral market power; simulate the effect of environmental policies, like a renewable portfolio standard (RPS), carbon tax, or cap-and-trade system; and make decisions about which kinds of generating units (for example, hydro, nuclear, coal, natural gas, wind, or solar) to buy under different market designs. We use the game as a teaching tool in Stanford courses and also conduct workshops with electricity policymakers and regulators to help them understand how different market rules may affect outcomes. In addition, we conduct randomized controlled trials of how different policies (for example, a carbon tax vs. a cap-and-trade system) affect market outcomes and the strategic behavior of market participants.