Power Pricing

So your base city got connected to the grid and you are now able to influence the power pricing directly. Understanding the power pricing will allow you to get most profit of your powerplant assets.

Sim Energy Empire uses real works mechanics in this regards. Let’s start with some basics.

Only power that can be instantly consumed is produced

Most important principle is that plants do not run, unless the power they produce can be used right away. Power produced does not go into a “warehouse”.

Many power plants have the “dynamic output” capability, meaning, they can throttle their output and produce less power if it is not needed.

Note: Solar plants, Nuclear plants, and power connections get damaged, in case there is more power then the grid (consumption) can handle.

Reverse Auction or Cheapest First

In real world and in Sim Energy Empire, there are situations where power plants can deliver more power then is needed. We need a system which determines which plants will be used, which plants get to have a priority.

This is done very simply, each power producer specifies their “offer price”. This is the price they are willing to sell power at. It usually reflects, but do not have to, their cost of producing the power. For example, a coal plant, after payng wages and buying coal, can produce power at $50 per MWh. So setting offer price at $50 might a be a good start.

In Sim Energy Empire, each power plant has the offer prices set, if you do not set them yourself, there are defaults used.

At tick computation time, the city consumption is determined based on population size and weather. Afterwards, the power plants are activated based on their offer price. The plants with cheaper offer price are used first.

Consider example with 20MWh Solar plant offering power at $30, and 40MWh Coal plant offering power at $50. The city needs just 30MWh. The solar, cheaper source, will be used first and fully, delivering 20MWh, the coal plant will only produce and deliver 10MWh, because city doesn't need more power.

The price that everybody is paid, spot price, is that of the most expensive source used, in this case it was the coal plant, with offer price of $50. So the spot price in this tick will be $50, and even the solar plant operator, who was offering power for $30, will be paid $50.

Note: The spot price computation, might be contra intuitive, but this is how this is done IRL. It motivates power producers to lower their offer prices.

If the city power demand is not met, there is power missing, the spot price is always $300.

Takeaway

By setting low offer prices, you increase the probability your plants will get to produce, deliver and sell the power. At the same time, if every power producer in the city thinks like this, the spot price will be very low. So your profit will be low as well.

In real life and in Sim Energy Empire, you will see the spot price being high in cities, with one or very few power producer, and with plants barely keeping up to the demand.

On the other hand, cities will many players, and lot of extra power production capacity will have low spot price.

Pricing Strategies

If the power plant has dynamic output capability, it makes sense to split the output to different price offer levels. Offering half of the plant’s output at lower price increases probability the plant will run at least partially. Offering part of the plant’s output at high price increases probability of high spot price.

You also want to take into account fuel availability. For example, if water is scarce, you probably do not want your hydro to use it all up while selling power for $30. Similarly, if you have difficulty sourcing your coal, gas and your reserves are low, you probably want to wait until power is expensive, before you run your plants.

Max production

In case your input is temporary: sun, wind, or your water reservoir is full. You want your plant to run, ideally at full capacity. This pricing strategy offers most of your plant’s output at low price, to increase chance it will run.

Fuel saving

This strategy offers your plant’s output for high price, meaning, it will only run if the power it produces can be sold for high price. Ideal, if you inputs are running low.

You basically want to reserve your scarce input for the moment when it can be turned into expensive energy and not use it up otherwise.

Balanced

Most of your plants output is offered for mid price ranges, while putting some output at both low and high. Increasing probability that the plant will run at least with low output, while still being able to push spot price up.