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Noname manuscript No. (will be inserted by the editor)

Summary: Noname manuscript No.
(will be inserted by the editor)
On the Dynamic Stability of Electricity Markets
Victor M. Zavala Mihai Anitescu
Received: date / Accepted: date
Abstract In this work, we present new insights into the dynamic stability of electricity
markets. In particular, we discuss how short forecast horizons, incomplete gaming,
and physical ramping constraints can give rise to stability issues. Using basic concepts
of market efficiency, Lyapunov stability, and predictive control, we construct a new
stabilizing market design. A numerical case study is used to illustrate the developments.
Keywords Dynamics Markets Electricity Efficiency Game-Theory Stability
1 Introduction
Electricity market models have become an indispensable tool for analyzing and pre-
dicting the impact of diverse dynamic drivers (e.g., weather, load, fuel prices, and
wind supply), physical constraints (e.g., ramping, transmission congestion), and gam-
ing behaviors (e.g., bidding strategies) on market efficiency and prices [26]. These mod-
els range from data-based time-series models [23,8] to mechanistic models based on
agent-based systems [7,25] and game-theoretical formulations [6,15]. Game-theoretical
models, in particular, make a systematic use of mechanistic gaming insights and phys-
ical constraints and thus provide more comprehensive predictive capabilities.


Source: Anitescu, Mihai - Mathematics and Computer Science Division, Argonne National Laboratory
Argonne National Laboratory, Mathematics and Computer Science Division (MCS)


Collections: Computer Technologies and Information Sciences; Mathematics