Real time pricing to assist in load frequency control

The use of real-time prices (i.e. pricing in the presence of system dynamics) to assist in the control of frequency and tie-line deviations in electric power systems is discussed. Under idealized assumptions, prices for load frequency control are derived that reflect the underlying physical relationships of the power system. Applying the theoretical results to a simple example, real-time prices determined by a feedback control law for frequency deviations are shown to aid in load frequency control. It is concluded that real-time pricing could serve as the basis of an economic load/shedding policy to assist the direct control by the electric utility