About the Game

 

Welcome to the website for the Energy Market Game—a tool developed at the Program and Energy and Sustainable Development (PESD) at Stanford University to help policymakers, regulators, market participants, and students improve their understanding of how energy and environmental markets work. On this site, you will find documentation about how the game works, interesting results from past runs of the game, information about customized educational workshops using the game, and, soon, simple games that you can be played in “solo mode” against computer-simulated agents.

Each player in the Energy Market Game takes on the role of an electricity generating company (“genco”) or of a company selling electricity to retail customers (“retailer”). In each hour of each simulated electricity market day, gencos offer in the capacities of their various generating units at whatever prices they choose. Retailers may enter into fixed-price forward contracts for electricity with gencos or simply buy electricity on the spot market. They may also call “critical peak pricing rebates,” in which they pay their simulated retail customers to reduce demand in a given period.

The Energy Market Game can incorporate environmental policies that are found in real markets, such as a cap and trade system for greenhouse gas emissions and a renewable portfolio standard (RPS) to incentivize the development of wind and solar facilities. When these additional elements are added to the basic features described above, the game becomes a sophisticated simulation of an electricity market subject to overlapping environmental regulations.

These kinds of complex markets have significant scope for strategic behavior and can be difficult to analyze theoretically. Our hope is that the game—and this website—will help policymakers, regulators, market participants, and students gain a higher level of comfort with these markets, as well as an improved sense of how markets may respond to different policies.