From Forecast Models to Policy Agents: Rethinking AI in Power Markets

What actually changes when you replace a prediction pipeline with a decision-making system — and why the gap matters more than most teams realize. The previous post in this series walked through a single day in a European power market — a wind-plus-battery portfolio, a good forecast, and a sequence of decisions that the forecast couldn’t help with. The conclusion was structural: electricity markets are sequential decision systems. The forecast-optimize-execute pipeline treats each trading stage independently, while the actual problem is coupled across time, assets, and market stages. This post is about what comes next. If the pipeline is wrong, what replaces it? The short answer is: a policy. The longer answer requires being precise about what that word means, why it’s different from what