March 25, 2018
March 25, 2018
March 27, 2018
Renewable Energy Engineering students at the Oregon Institute of technology may take an elective course covering the economics of electicity markets. In this paper we describe a simulated electricity wholesale market activity developed by the authors, that allows students to learn about market economics by controlling their own fleet of power plants. We also share the experience of using the market simulation in the classroom.
The market game simulates a day-ahead electricity market, where students submit bids (i.e. minimum prices seller is willing to accept) for all of their generating capacity, sell their power at a market clearing price, and then make a profit or loss. This is repeated for several rounds, each corresponding to a simulated day of electricity usage. Simulated power plants have different fuel types, (coal, nuclear, natural gas), as well as varying efficiencies. During bidding students are given predictions for fuel prices and overall demand for the next round, which they may use for determining their bids. The students overall profit is maintained over successive bid rounds, and forms the students "score" for the game.
This paper also describes a custom software web application (EMM-app) developed by the authors for running the simulated market, which allows students to play the market model through a web browser. The EMM-app system greatly eases the instructor burden in running the market activity.
This software was used to facilitate a class of students taking a course in electricity markets to play the simulated market, with students playing (submitting bids) weekly over the course of a 10-week term. Student feedback regarding the market model game and the EMM-app software were highly positive. An important question for us is whether students are applying the theoretical coursework learned in class towards their behavior in the market game. We analyze the behavior of a cohort of students, in order to determine if we could observe changes in bidding behavior as certain economic topics were covered in the class. Interestingly, we observe a subset of students whose behavior changes when the topic of intentional market manipulation is covered.
Hammond, D. K., & Corsair, H. J. (2018, March), Teaching economics of electricity markets using a web-based model market game Paper presented at 2018 ASEE Zone IV Conference, Boulder, Colorado. https://peer.asee.org/29628
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