Dynamic pricing and stabilization of supply and demand in modern electric power grids
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Dahleh_Dynamic pricing.pdf
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Author(s)
Roozbehani, Mardavij
Dahleh, Munther A.
Mitter, Sanjoy K.
Date Issued
October 2010
Journal
IEEE International Conference on Smart Grid Communications (SmartGridComm)
Publisher
Institute of Electrical and Electronics Engineers
Citation
Roozbehani, M., M. Dahleh, and S. Mitter. “Dynamic Pricing and Stabilization of Supply and Demand in Modern Electric Power Grids.” Smart Grid Communications (SmartGridComm), 2010 First IEEE International Conference On. 2010. 543-548. Copyright © 2010, IEEE
Version
Final published version
Abstract
The paper proposes a mechanism for real-time pricing of electricity in smart power grids, with price stability as the primary concern. In previous publications the authors argued that relaying the real-time wholesale market prices to the end consumers creates a closed loop feedback system which could be unstable or lack robustness, leading to extreme price volatility. In this paper, a mathematical model is developed for characterization of the dynamic evolution of supply, (elastic) demand, and market clearing (locational marginal) prices under real-time pricing. It is assumed that the real-time prices for retail consumers are derived from the Locational Marginal Prices (LMPs) of the wholesale balancing markets. The main contribution of the paper is in presenting an effective stabilizing pricing algorithm and characterization of its effects on system efficiency. Numerical simulations conform with our analysis and show the stabilizing effect of the mechanism and its robustness to disturbances.
MIT Department
Massachusetts Institute of Technology. Department of Electrical Engineering and Computer Science
Massachusetts Institute of Technology. Engineering Systems Division
Massachusetts Institute of Technology. Laboratory for Information and Decision Systems
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1109/SMARTGRID.2010.5621994
