Dynamic pricing in consolidated ancillary service markets

Joshua A. Taylor, Ashutosh Nayyar, Duncan S. Callaway, Kameshwar Poolla

Research output: Chapter in Book/Report/Conference proceedingConference contribution

3 Scopus citations


Regulation is a costly aspect of power system operation, which has long been inadequately and inconsistently incentivized via ill-formulated pricing schemes, as recently acknowledged by regulators. We propose a pricing formulation in which regulation prices are the optimal dual multipliers or costate of an optimal control problem. More precisely, we use the linear quadratic regulator to formulate a regulation pricing policy. We then construct a Vickrey-Clarke-Groves mechanism to induce honest participation among selfish agents. We apply the formulation to a scenario combining traditional frequency regulation and the California Independent System Operator's Flexible Ramping Product.

Original languageEnglish (US)
Title of host publication2013 European Control Conference, ECC 2013
PublisherIEEE Computer Society
Number of pages6
ISBN (Print)9783033039629
StatePublished - 2013
Externally publishedYes
Event2013 12th European Control Conference, ECC 2013 - Zurich, Switzerland
Duration: Jul 17 2013Jul 19 2013

Publication series

Name2013 European Control Conference, ECC 2013


Conference2013 12th European Control Conference, ECC 2013

All Science Journal Classification (ASJC) codes

  • Control and Systems Engineering


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