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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. We discuss how short forecast horizons, limited coordination, and physical
ramping constraints can give rise to high price volatility. Using concepts of market
efficiency, Lyapunov stability, and predictive control, we construct a framework to
design and evaluate stabilizing market clearing procedures. A numerical case study is
used to illustrate the developments.
Keywords Dynamics Markets Electricity Efficiency Game-Theory Stability
1 Introduction
Stability (volatility) of wholesale electricity markets is associated with strong fluc-
tuations of prices. Extreme price fluctuations reflect periods of scarcity induced by
physical generation and transmission constraints from which a small subset of market
participants benefit [7]. Consequently, controlling price fluctuations can lead to a more
homogenous distribution of the social welfare. In addition, it can reduce speculation
and thus incentivize investment and market participation [2].
There exist several evidences of extreme price volatility in operational markets [27,

  

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

 

Collections: Mathematics