Real time pricing to assist in load frequency control

Abstract
This paper explores pricing at time scales where the We study the use of real time prices to assist in the control of frequency and tie line deviations in electric power systems. The role of such prices, if any, would yield the practical limit to the trend in electric power systems of varying prices on ever faster time scales. Under idealized assumptions, we derive prices for load frequency control that reflect underlying physical relationships of the power system. Applying the theoretical results to a simple example, real time prices, determined by a feedback control law of frequency deviations, are shown to aid in load frequency control. We conclude that real time pricing could potentially serve as an economic load shedding policy to assist the direct control by the electric utility.