Markets and pricing for interruptible electric power

Pricing games among interconnected microgrids

“…It can be checked that when s 1 = s 2 = s 3 = s, the NE strategies in (24), (25) and (26) reduce to those computed in Section III.…”

“…We now compare the structure of the NE given by (24), (25) and (26) with that in Theorem 1. First, note that by (24), (25) and (26), for x in the range [p, R 3 ), each of ψ 1 (x), ψ 2 (x) and ψ 3 (x) equals F (x) times a constant factor (i.e., a factor that does not depend on x), and hence they differ only by a constant multiplicative factor.…”

“…First, note that by (24), (25) and (26), for x in the range [p, R 3 ), each of ψ 1 (x), ψ 2 (x) and ψ 3 (x) equals F (x) times a constant factor (i.e., a factor that does not depend on x), and hence they differ only by a constant multiplicative factor. This is similar to the NE strategies in Theorem 1 (with n = 3), for which, by (6) and the fact that ϕ i (x) = q i ψ i (x), each of ψ 1 (x), ψ 2 (x) and ψ 3 (x) equals ϕ(x) times a constant factor on x ∈ [p, R 3 ).…”

“…The penetration of this nascent technology is therefore contingent on the design of a distributed and scalable electricity trading framework equipped with dynamic pricing strategies that adapt to the load and price fluctuations of the macrogrid and all the microgrids. This design may not be accomplished adopting the macro-economics viewpoint that has been extensively used for analyzing traditional electricity markets (even those that consider renewable electricity generations) e.g., [18], [19], [20]: a macro-economic market consists of an infinite number of buyers and sellers and the competition is perfect in that the price of the commodity to be traded is exogenous and not affected by the choices made by the constituents of the market, but may be determined so as to maximize a social utility e.g., [21], or based on risk neutral pricing (which assumes arbitrary storage capabilities) e.g., [22], [23], [24], [25], [26]. Given that the microgrid technology is now growing (albeit rapidly as projected), starting from the stage that microgrids have only been experimentally deployed so far, a microeconomic analysis that considers a market with a finite number of entities and allows the trade dynamics to depend on the choices of and the uncertainties experienced by the individual entities is imperative.…”

Competition in a Pure World of Internet Telephony

“…Since Internet service providers only promise best efforts, they have established what in the energy industry is called an interruptible contract. By way of such contracts with (mainly commercial) customers, energy companies substantially reduce the peak load, and thereby the overall cost of the grid and production facilities (Gedra & Varaiya, 1993).…”