Academic Journal
On the Stability, Economic Efficiency, and Incentive Compatibility of Electricity Market Dynamics
| Title: | On the Stability, Economic Efficiency, and Incentive Compatibility of Electricity Market Dynamics |
|---|---|
| Authors: | Pengcheng You, Yan Jiang, Enoch Yeung, Dennice F. Gayme, Enrique Mallada |
| Source: | IEEE Transactions on Automatic Control. 70:6815-6830 |
| Publication Status: | Preprint |
| Publisher Information: | Institute of Electrical and Electronics Engineers (IEEE), 2025. |
| Publication Year: | 2025 |
| Subject Terms: | FOS: Economics and business, 0209 industrial biotechnology, General Economics (econ.GN), Optimization and Control (math.OC), 0202 electrical engineering, electronic engineering, information engineering, FOS: Mathematics, 02 engineering and technology, 16. Peace & justice, Mathematics - Optimization and Control, Economics - General Economics |
| Description: | This paper focuses on the operation of an electricity market that accounts for participants that bid at a sub-minute timescale. To that end, we model the market-clearing process as a dynamical system, called market dynamics, which is temporally coupled with the grid frequency dynamics and is thus required to guarantee system-wide stability while meeting the system operational constraints. We characterize participants as price-takers who rationally update their bids to maximize their utility in response to real-time schedules of prices and dispatch. For two common bidding mechanisms, based on quantity and price, we identify a notion of alignment between participants' behavior and planners' goals that leads to a saddle-based design of the market that guarantees convergence to a point meeting all operational constraints. We further explore cases where this alignment property does not hold and observe that misaligned participants' bidding can destabilize the closed-loop system. We thus design a regularized version of the market dynamics that recovers all the desirable stability and steady-state performance guarantees. Numerical tests validate our results on the IEEE 39-bus system. |
| Document Type: | Article |
| ISSN: | 2334-3303 0018-9286 |
| DOI: | 10.1109/tac.2025.3589447 |
| DOI: | 10.48550/arxiv.2112.05811 |
| Access URL: | http://arxiv.org/abs/2112.05811 |
| Rights: | IEEE Copyright arXiv Non-Exclusive Distribution |
| Accession Number: | edsair.doi.dedup.....0c48b3fdfa74ee841d46256d7f82e675 |
| Database: | OpenAIRE |
| ISSN: | 23343303 00189286 |
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| DOI: | 10.1109/tac.2025.3589447 |