Vision
Why the electricity system needs a new operating architecture.
Overview
The electricity system is undergoing the largest transformation in its history.
For over a century, electricity networks were designed around large centralised power stations supplying passive consumers through one-way transmission and distribution networks. Markets were designed to optimise the dispatch of relatively small numbers of generators whose output could be controlled directly.
That world no longer exists.
Modern electricity systems are becoming highly distributed cyber-physical networks comprising millions of devices capable of consuming, producing and storing energy. Electric vehicles, batteries, heat pumps, rooftop solar and flexible industrial loads are transforming consumers into active participants in the operation of the grid.
Yet many of the economic mechanisms used to coordinate the electricity system remain fundamentally unchanged.
FP-AMM begins from the premise that the electricity market should evolve alongside the physical electricity system.
Electricity as a Coordinated Network
The purpose of an electricity market is not simply to determine prices.
Its purpose is to coordinate millions of independent decisions so that energy is produced, transported and consumed safely, efficiently and fairly.
Every generator decides when to produce.
Every consumer decides when to consume.
Every battery decides when to charge or discharge.
Every network asset possesses finite capacity.
Every decision influences every other decision.
The electricity market therefore acts as the coordination mechanism linking engineering and economics.
FP-AMM seeks to make this coordination continuous, transparent and physically grounded.
Prices as Engineering Signals
In FP-AMM, prices are not viewed simply as financial outcomes.
They are viewed as distributed control signals.
Prices communicate where energy is abundant.
Prices communicate where network capacity is scarce.
Prices encourage flexible demand to move towards periods and locations where electricity provides the greatest value to the overall system.
Economic incentives therefore become directly aligned with the physical operation of the electricity network.
A Market That Mirrors the Grid
The electricity grid is already organised as a hierarchy of interconnected systems.
Households connect to feeders.
Feeders connect to substations.
Substations connect to transmission networks.
Transmission networks together form the national electricity system.
FP-AMM mirrors this physical architecture.
Rather than relying on a single centralised optimisation, coordination occurs throughout the network using a hierarchy of interacting markets that continuously exchange economic information.
The market therefore scales naturally with the physical electricity system.
Reliability as a Choice
Not every electricity service requires the same level of reliability.
Some services require immediate and uninterrupted supply.
Others possess significant flexibility.
FP-AMM recognises these differences by treating reliability as an explicit service rather than an implicit engineering assumption.
Customers remain free to choose which devices participate in the market while essential electricity services continue to receive the level of reliability expected from today's electricity system.
Flexibility becomes voluntary, transparent and economically rewarded.
Fairness by Design
Periods of genuine scarcity cannot always be avoided.
When insufficient energy or network capacity exists to satisfy every request simultaneously, the electricity system must decide how available resources should be allocated.
FP-AMM treats fairness as a core design principle rather than an afterthought.
Allocation decisions are governed by transparent, programmable rules that ensure customers are treated consistently over time while respecting the service commitments they have chosen.
Fairness therefore becomes an integral part of market operation.
Rewarding System Value
Electricity is not equally valuable at every place or every moment.
Generation located behind a constrained network may provide significantly greater value than identical generation elsewhere.
Similarly, electricity delivered during periods of scarcity contributes more to system reliability than electricity delivered when supply is abundant.
FP-AMM therefore seeks to reward participants according to the value they create for the electricity system rather than solely according to the quantity of energy they produce or consume.
Investment incentives become aligned with long-term system needs.
A Continuously Operating Market
Modern electricity systems evolve continuously.
Renewable generation changes with the weather.
Consumers connect and disconnect flexible devices.
Network conditions change from minute to minute.
Rather than coordinating these changes through a sequence of periodic market intervals, FP-AMM operates continuously.
Every accepted transaction updates the state of the market.
Every change in state updates prices.
Every price influences the next decision.
The market therefore becomes a continuously operating cyber-physical control system rather than a collection of disconnected auctions.
An Open Platform for Innovation
The electricity system will continue to evolve.
New technologies, business models and operating practices will emerge throughout the coming decades.
Rather than embedding fixed assumptions about how future electricity systems should operate, FP-AMM provides a flexible coordination framework capable of incorporating new devices, services and market participants as they appear.
Innovation should compete on evidence rather than on institutional preference.
New ideas should be evaluated rigorously against common objectives including affordability, reliability, fairness, resilience and sustainability.
The market itself should evolve as the electricity system evolves.
Building the Next Generation Electricity Market
The vision of FP-AMM is not simply to redesign electricity pricing.
It is to create a market architecture capable of coordinating millions of distributed energy resources while remaining economically coherent, physically feasible and fair.
By integrating continuous market clearing, distributed price formation, holarchical coordination, programmable reliability, transparent fairness and system-value settlement into a single architecture, FP-AMM aims to provide a foundation upon which the next generation of electricity systems can be built.
The remainder of this documentation describes the principles, mechanisms and algorithms that realise this vision.