Stable Interconnection of Continuous-Time Price-Bidding Mechanisms with Power Network Dynamics

We study price-based bidding mechanisms in power networks fo r real-time dispatch and frequency regulation. On the market side, we consider the interaction between the independent system operator (ISO) and a group of generators involved in a Bertrand game of competition. The generators seek to maximize their individual profit while the ISO aims to solve the economic dispatch problem and to regulate the frequency. Since the generators are strategic and do not share their cost functions, the ISO engages the generators in a continuous-time price-based bidding process. This results in a coupling between the ISO-generator dynamics and swing dynamics of the network. We analyze its stability, establishing frequency regulation and the convergence to the efficient Nash equilibrium and the optimal generation levels. Simulation illustrate our results.