Holarchical Coordination
Recursive coordination across households, feeders, networks and system levels.
Modern electricity systems consist of millions of independently operating devices connected through a naturally hierarchical physical network. Attempting to coordinate these resources using a single centralised optimisation becomes increasingly difficult as the system grows in size and complexity.
FP-AMM adopts a holarchical architecture, recognising that the electricity grid is already organised as a hierarchy of interacting systems. Households, feeders, substations, transmission regions and the national grid each manage their own resources while simultaneously forming part of a larger whole. Every level continuously coordinates the resources beneath it using the same market mechanism, allowing the overall system to scale naturally from individual devices to the national electricity network.
Rather than computing a single market-wide price, each holon estimates the scarcity of the resources under its control and produces a local economic signal. These prices propagate through the hierarchy, with the most restrictive constraint naturally determining the price observed by participants. In this way, local engineering constraints become local economic incentives, enabling millions of autonomous decisions to remain aligned with the physical realities of the electricity system.
This section introduces the principles of holarchical coordination, explains why the electricity grid is naturally suited to this architecture, and describes how distributed price formation and constraint propagation enable a continuously operating, physically feasible electricity market.