Irrational Agents and the Power Grid
summary
Claim: real-time marginal prices fail as a coordination mechanism because power is not the commodity consumers value — temperature and thermal inertia are, so time-varying prices trigger pre-cooling and rebound spikes instead of smooth reductions. Evidence: simple ramp constraints create extreme price volatility, battery mileage auctions collapse to zero, and demand dispatch can shift several gigawatts using water heaters and refrigerators while preserving customer comfort. Conclusion offered: real-time marginal prices fail for many loads and centralized or contract-based control is the effective solution.
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chapters (18)
- 0:00Introduction
- 1:45Irrational Agents
- 2:47Balancing Authority
- 3:35Mistake 1 Fixed Costs
- 6:20Mistake 2 Negative Prices
- 7:50Market Structures
- 8:20The Balancing Authority
- 9:22Realtime Prices
- 14:54Reserve Model
- 15:45Dynamic Setting
- 16:35Welfare Functions
- 19:17Constraint Settings
- 20:12Quiz
- 21:35Power Consumption
- 23:54Efficient Outcome
- 26:23Fridges
- 26:51LongTerm Contracts
- 27:19Control