Control theory application in power market stability analysis

This paper proposes a new framework to model the system dynamics and study the system stability for the quantity bidding competition in power market. From the viewpoint of control theory, the quantity bidding competition is modeled as close-loop dynamic system, where market price is the system feedback signal. Based on the objective of maximizing individual profit in a shot-game, a general dynamic process is given to describe supplier's adjustment behavior, which can be used to model all classical bidding and CV-based bidding strategies. With the application of control theory, sufficient stability conditions and market equilibrium is presented. Computer test results support the analytic conclusion very well.