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The role of energy imbalance management on power market stability

Power system markets represented by dynamic equations provide insights into market behavior which are not available from static models. The dynamic coupling between energy imbalance and markets is studied by modelling market dynamics, together with electromechanical power system dynamics. MATLAB based software is used to evaluate the eigenvalues of a linearized version of an interconnected power system including dynamic market equations. The effect of network congestion on a market with several suppliers and several consumers is considered. Numerical results are presented to illustrate the proposed model and to show how improper handling of energy imbalance in a system can lead to an unstable market.