skip to content
 

Irrational Agents and the Power Grid

Presented by: 
Sean Meyn University of Florida
Date: 
Thursday 10th January 2019 - 16:00 to 17:00
Venue: 
INI Seminar Room 1
Session Title: 
PM - Optimization & Control
Abstract: 
For decades power systems academics have proclaimed the need for real time prices to create a more efficient grid.   The rationale is economics 101: proper price signals will lead to an efficient outcome.   In this talk we will review a bit of economics 101;  in particular, the definition of efficiency.   We will see that the theory supports the real-time price paradigm, provided we impose a particular model of rationality.    It is argued however that this standard model of consumer utility does not match reality:   the products of interest to the various "agents" are complex functions of time.  The product of interest to a typical consumer is only loosely related to electric power -- the quantity associated with price signals.   There is good news:  an efficient outcome is easy to describe, and we have the control technology to achieve it.  We need supporting market designs that respect dynamics and the impact of fixed costs that are inherent in power systems engineering, recognizing that we need incentives on many time-scales.     Most likely the needed economic theory will be based on an emerging theory of efficient and robust contract design.
The video for this talk should appear here if JavaScript is enabled.
If it doesn't, something may have gone wrong with our embedded player.
We'll get it fixed as soon as possible.
University of Cambridge Research Councils UK
    Clay Mathematics Institute London Mathematical Society NM Rothschild and Sons