Starting from the global time-varying optimization problems and constraints, formulated in Task 1.4 of WP1, the main goal of WP2 is to devise efficient price-based decomposition/coordination algorithms for these global optimization problems. Each problem (i.e. (i), (ii) and (iii) from Task 1.4 of WP1) will be decomposed into a set of local optimization problems, where each local optimization problem is assigned to one PRP. This decomposition will be based on Lagrange duality theory, where a dual variable (price) will be assigned to each global constraint. Each PRP will receive a set of prices which will enter as parameters in its local objective function. Distributed algorithms will be devised for computing the prices so that the local optimization problems will be coordinated in such a way that the global constraints are satisfied. The real and near-real time varying price signals, updated from 1) the on-line measurements of global constraints and 2) information from PRPs in form of suitably defined bids, will be guaranteed to adequately reflect the state of the physical system as well as the currently required actions to optimally ensure its future integrity and reliability. This work package will be performed in close cooperation with WP3 and WP4. In particular, this cooperation will define the ICT interfaces on the global level (“ICT interface 1”) and the ICT interfaces among the market/system operator and the PRPs (“ICT interface 2”).