An Internet-based game in which business students try to maximize profits from power plants is being refined to replicate California's markets for electricity, carbon dioxide emission permits and renewable energy certificates. Thurber and Wolak used updated versions of the game in their Graduate School of Business course "Energy Markets and Policy” in winter 2014 and winter 2015. Students identified the game as by far the most educational component of the class.
Game simulations so far have shown that prices for tradable renewable energy certificates are quite volatile. Renewable energy developers may therefore find the certificates difficult to count on for a predictable revenue stream without policy measures such as caps and floors on certificate prices. Also, large providers of renewable energy used market power in the certificate market to inflate prices even when renewable energy targets were met. Also, in one simulation, a team cornered the carbon market, raising carbon and electricity prices at times even with ample renewable energy.
Using the game, staff of the California Public Utilities Commission and energy officials from Ghana learned how forward contracting and demand response could help mitigate market power. The game has been used at other conferences and workshops as well.
In a follow-up project in collaboration with the Vice Provost for Online Learning, researchers will put the game on its own website for use by educators for classes or other settings, by players on the web in self-organized games, or by individuals against computer-simulated market participants.