Abstract
This paper presents dynamic output integration mechanisms for LQG power networks based on mechanism design theory in economics. The LQG power network model, which is motivated by an average system frequency model, consists of suppliers and consumers, called agents, and one public commission, called the utility. Each agent, who has a type with his preference, decides his private control to minimize his own cost functional, while the utility decides prices to minimize a public cost functional. In this problem setting, we propose two dynamic output integration mechanisms based on the cost functional and Hamiltonian. Both mechanisms under which the utility estimates agents' state on price calculation, satisfy the public optimality of the optimal private controls, incentive compatibility, and individual rationality. The effectiveness of the proposed mechanisms is assessed through simulation results.
