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Price Volatility and Stability in Electric Markets

KEMA has recently developed analyses and simulations of the interaction of new classes of load behavior in energy markets. The analyses include the day ahead, hour ahead, and intra-hour / real time markets and their interactions. The new classes of load behavior include “Dispatchable Demand Response” (under the real time scheduling and control of the market); autonomous Dynamic Price response (load reacting to market prices), and Self Optimizing Customers (with embedded generation/storage who can adjust their hourly load to published day ahead prices). The technical performance of different categories of generation as well as different end use loads (refrigeration, HVAC, water heating, lighting, etc) are considered. The work exposes price volatility and instability in the different market time periods based on the penetrations of the different load classes. It also explores how market operations can be stabilized if the load elasticity is understood and considered in the market clearing process. The alignment of load dynamic performance (response time, duration of response, etc) with market periodicities is also explored. Some explanation of observed market dynamic behavior can be related to recent MIT work as well as economic theory (the Cobweb theorem) or to simplified feedback systems models and stability criteria. This talk, given on September 12, 2011, was co-sponsored by the MIT Energy Initiative and the Laboratory for Information and Decision Systems (LIDS)

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MIT Energy Initiative

MIT Energy Initiative

Category: Environment/Energy | Updated 6 months ago

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September 13, 2011 13:51
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