This blog is intended to collect input to the design of a web-based simulator which would be targeted to identifying weaknesses, improvements and comparative strengths of a variety of energy market designs, particularly electricity market design.  The reason for this initiative is that it is my response to a prod by Jeff Presley in the comments to an article on EnergyPulse.net, which article and comments can be found at  [http://www.energypulse.net/centers/article/article_display.cfm?a_id=1557]

Below are the relevant excerpts from three of Jeff’s comments.

Jeff Presley:  ( 9.6.07 )

An interesting site appeared today funded by Chevron and The Economist [Energyville - http://www.willyoujoinus.com/]
Here's a link to the story behind it. http://www.willyoujoinus.com/issues/

What makes it interesting is the concept that you can run simulations to try and determine an optimum scenario, fuel mix etc. Naturally I don't want to brag about my high (actually low) score and ranking since it could certainly disappear soon. However, it would be valuable to "game" this kind of approach for the economic impact of your various proposals, such as pure retail, government retail, pure regulated etc.

For reasons unknown, when enough humans "vote" on an outcome, their predictive capacity ala betting sites is amazingly good. I think Chevron and the Economist might be on to something here, once they make improvements and allow for more "consumer" behavior in the model.

(further ... 9.10.07 )

I never said the site was perfect, just an interesting viewpoint to how to solve your impasse. Both you (EWPC) and Len (IMEUC) feel you have the best approach, but the fact is, no one will let either of you implement your scheme. in the REAL world. So it would be wise to simulate it and see how the simulations come out.

The bad news for almost all "change orders" to electricity per the GenCo, TransCo, DisCo and MarkCo model is that the entrenched provider isn't recompensed for their stranded generation capacity, transmission capacity, distribution capacity etc. Therefore your panacea of letting MarkCo solve the world's problems never gets to happen, because of those Billions that have been spent building up the 1st three.

Deregulation doesn't work because the monopoly rightfully asks the regulators for something in the kitty to pay them back for all that stranded plant. Right away, there is a thumb on the scale as the butcher weighs out that meat..

(further ... 9.20.07 )

... A simulation might indeed find things neither of you had considered, which would be a good thing.

As Don and Ed have mentioned, leadership failure on the part of politicians isn't to be ignored, it is to be expected. We would simulate before we put up a large bridge, before we built a large building, why not before we implement a large change to the status quo, that could deleteriously effect millions?

That was my one and only point, that this problem is actually easier to heuristically define than either of you seem to realize and the outcome would certainly be interesting if not incredibly valuable. It seems there would be SOMEONE out there willing to fund this, maybe the same folks who fund EPRI, or even EPRI themselves? Admittedly it is far too scientific an approach for our politicians to utilize, they are all about gaming the system, not systematically utilizing gaming theory for predictive purposes.

{ ends the snips of Jeffs comments }

It is my opinion that the development of such a simulator is a very laudable goal, and perhaps even achievable in a useful form by a GNU type of collaboration among several interested software experts.  It should certainly be possible here to work out the specifications of such a simulator, in particular it’s inputs, algorithms, and outputs.  I would like to start by politely requesting that any comments not strictly relevant to the design of a simulator should please be placed not here but elsewhere.  I’ve begun a related discussion blog on this site which may serve that purpose for you.

I'll start the design discussion off by suggesting that the simulator should as a minimum requirement be capable of modelling an existing North American market, in order to provide useful initial data for the simulation.  My initial thought would be to make the simulator capable of modelling the state of Texas as a basic requirement, because Texas' grid is isolated from all it's neighbors, it has a growing and dynamic economy, and can provide historical statistical data for both a Type I de-regulated electricity market and (in recent history) a fully regulated market.

[Issue 1]
.."What types, sizes of customer bases, etc. should the simulator be capable of simulating?."

[Issue 2]
. “What questions do we want the simulator to answer?"

[Issue 3]
.. “What outputs will be required of the model?”.  Specific data items, and presentation.

[Issue 4]
.. “What inputs will be required for the model to perform its task?”

[Issue 5]
.. “What algorithms will the model use to arrive at its results?  What sort(s) of flexibility are required of the algorithm engine?  How can that be provided?”

[Issue 6]
.. “What data storage, system and structures, should be used to underpin the simulator?  How flexible?  How much time?  What detail?  What sort of query requirements will there be against the raw data?  How satisfied?”

[Issue 7]
.. “What software architecture?  Hardware requirements?”

It is immediately apparent of course that some of these questions are somewhat circular, e.g. Issue 4 can’t be answered until Issue 5 is resolved at least partly, and vice versa.  That’s simply to be expected at this stage, so let’s get started.  Let’s keep things as much as possible high-level for a start, (the view from 50,000 feet) until we get a sense of some agreement among at least a group majority on some of the issues.