Frequency dynamics in power systems reflect active power imbalance in real time, thereby providing an instantaneous signal to inform electricity pricing. However, existing real-time markets operate on much slower timescales and fail to exploit this signal. In this letter, we develop integrated market--frequency dynamics that enable online pricing directly from frequency measurements. Representing the real-time market as a dynamic price-discovery process, and integrating this process with the grid frequency dynamics, we derive an explicit price formation mechanism from frequency measurements. This mechanism manifests as a distributed PID-like controller for each generator, where frequency response is driven and remunerated by electricity prices derived solely from local frequency measurements.
@article{arxiv.2604.09931,
title = {Online Electricity Pricing from Frequency Measurements},
author = {Xinwei Liu and Vladimir Dvorkin},
journal= {arXiv preprint arXiv:2604.09931},
year = {2026}
}
Comments
4 pages, 3 figures, accepted to PowerUp Conference