A Study of Power Market Dynamics Based on System Dynamics Modeling

In the market operation, it is a very important task to effectively master and manage the dynamic behaviors of power market. In the dynamic modeling of power market, the dynamic models only describe the simple relationship between supply and demand, not to reflect complex market behavior, and thus are out of accord with actual power market. In order to take into account the complex relationship among market participants and more accurately reflect the actual power market dynamics, in this paper the system dynamics (SD) is introduced, and further the system dynamics modeling for power market is proposed, which consists of internal and external structure among the generation, load and operation institute governing the wholesale power market based on many nonlinear differential equations with feedback and time delays. The dynamic behaviors of market variables such as the construction capacity of new power plants, system capacity, generation quantities, demand quantities and electricity price are simulated. The simulated dynamic evolution of California power market shows the validity and feasibility of the proposed system dynamics model.