Electricity Market Stochastic Dynamic Model and Its Mean Stability Analysis

Zhanhui Lu, Weijuan Wang, Gengyin Li and Di Xie

Mathematical Problems in Engineering, 2014, vol. 2014, 1-8

Abstract:

Based on the deterministic dynamic model of electricity market proposed by Alvarado, a stochastic electricity market model, considering the random nature of demand sides, is presented in this paper on the assumption that generator cost function and consumer utility function are quadratic functions. The stochastic electricity market model is a generalization of the deterministic dynamic model. Using the theory of stochastic differential equations, stochastic process theory, and eigenvalue techniques, the determining conditions of the mean stability for this electricity market model under small Gauss type random excitation are provided and testified theoretically. That is, if the demand elasticity of suppliers is nonnegative and the demand elasticity of consumers is negative, then the stochastic electricity market model is mean stable. It implies that the stability can be judged directly by initial data without any computation. Taking deterministic electricity market data combined with small Gauss type random excitation as numerical samples to interpret random phenomena from a statistical perspective, the results indicate the conclusions above are correct, valid, and practical.

Date: 2014
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Persistent link: https://EconPapers.repec.org/RePEc:hin:jnlmpe:207474

DOI: 10.1155/2014/207474

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