Electricity market basicsSlides [link]
To help reinforce the concepts discussed last week, this week we’re going to be playing the Stanford Energy Market Game. This game simulates the California electricity market.
Required reading and response questions
- Read the Energy Market Game About page and player tutorial.
- Watch this short video on California’s ISO (the market we’ll be looking at in the game).
- Watch this short video lecture on how a uniform price electricity auction works.
- How do generators make money in a uniform price auction like the one described in the last video? Do you think power plants make more money if they bid their true costs or if the bid higher or lower? Response should one paragraph. Don’t worry if you don’t “know” the answer, just try to reason through it.
- Read RFF’s Carbon Pricing 202 Explainer
- What are the channels through which a tax on carbon emissions from electric generators reduces carbon emissions?
- Which channel do you think will be most important (ie will result in the biggest drop in emissions)?