Research On Market Price Fluctuation Management In Power System Reform

The reform of the power system is a decisive factor for the market to play a decisive role in the allocation of power resources and the government's role is better played.The power industry is a basic industry that relates to national energy security,economic development,and social stability.Further deepening the reform will help the company to grow steadily and adjust its structure,which can effectively control the cost of the company and improve the efficiency of the grid enterprises.The liberalization of the power sales business allows diversified market players to participate in the competition in the power sales market,which is conducive to better serving users' power needs,and thus allowing the dividends of power market reforms to benefit users.The market-oriented reform of the power industry will inevitably lead to changes in the relationship between supply and demand and with some new features.These changes,in turn,will affect the progress and direction of the reform of the power system to a great extent.These characteristics also determine the main features of the new market.China's power industry is facing accelerated opportunities for reform and development.Therefore,it is necessary to comprehensively evaluate the performance of the reform of the power market,analyze and evaluate the effects of the implementation of policies in different reform stages of the power industry systematically.Which is of great significance for discovering the efficiency improvement of the power industry and it also provides a reference for promoting the reform of the power system and the formulation of effective policies for the improvement of the power market systemDue to market conditions,power generation companies carry out independent operations,coupled with the inherent characteristics of the power industry,power generation companies are faced with a variety of operational risks.Because the sudden changes in supply and demand cannot be balanced by reserves,the equilibrium price of the electricity market shows a strong volatility.The variability of electricity prices in the electricity market has caused all market players to face enormous risk of loss of profits.Therefore,more and more market participants recognize the importance of managing electricity price fluctuations and actively adopt appropriate risk management tools and methods to circumvent or control risks.Forward-looking research on the price volatility risk brought by electricity marketization becomes extremely necessary and has important guiding significance.Combining the trading and operating models of foreign mature electricity markets,and from the practical experience of developed countries,the best way to manage the volatility of electricity prices is to improve the market system.Developed countries often adopt comprehensive measures to reduce the sharp fluctuations in prices,such as improving the market structure,establishing capacity guarantee mechanisms,increasing the proportion of long-term contracts,establishing futures markets,and increasing the degree of demand-side responses.This article proposes to allow the purchase of electricity between contracted users to improve Power Assisted Trading Market,and to develop the electricity futures market to improve the electricity market system.We first introduce the reform history and transaction status of mature power market transactions in the United States,Europe and other countries;sort out the reform process of China's power market,analyze the achievements and problems of China's power market reform;analyze the causes of electricity price fluctuations under market-based pricing conditions and its impact on the macro economy.On this basis,the paper applies the industry organization theory SCP framework and empirical analysis method to evaluate the performance of China's power market reform.Direct trading in the electricity market may bring about the problem of excess or insufficient power in the contract of the purchaser.The article construct a theoretical model of contract electricity trading between power purchase users and analyze the examples to compare the costs before and after the cooperative transaction between power purchase users and Analysis of the impact of transaction costs and inter-regional power transmission costs on users' participation in contract electricity transactions.Finally,the paper studies the management of electric power futures on the risk of price fluctuations in the electricity market,and conducts empirical research on hedging.Analyze and study power plant risk management and power distribution management.The main conclusions of the paper are as follows:(I)After many rounds of power system reform,China's power system reform has realized the separation of plant and network.Since the new round of power system reform in 2015,certain achievements have been made in power generation reform,trading platform construction,and cross-regional power trading.The power market has been initially established,and the power trading varieties have been improved,direct trading of electricity has increased significantly.However,there are still some shortcomings in the key links.There are some problems in the reform,which have certain obstacles to further deepen the reform of the power system.There are certain deficiencies in in the transmission and distribution price accounting,power cross-subsidization,cross-regional inter-provincial power transmission,power trading mechanism and supervision.(II)The article uses SCP framework to analyze China's electricity market structure,market behavior and market performance.It is found that with the continuous advancement of power system reform,the degree of marketization of the power industry has been improved to a certain extent,and China's power industry has undergone positive changes.Not only does the increase in installed capacity increase the power demand of China's rapid economic growth,but also the increase and improvement of the relative value and absolute value of various technical and economic indicators such as Line loss rate,power generation coal consumption and economic benefits.However,it is still necessary to further deepen reforms in terms of market concentration and electricity prices that cannot fully reflect the relationship between supply and demand.(?)The article builds a panel measurement model to examine the impact of major power market events(The cancellation of the Ministry of Electric Power,the reorganization of the power industry,the implementation of the "Regulations on the supervision of the electricity market" and the restart of the“direct purchase of electricity" pilot program in 2014)on the amount of electricity generated per capita.The results show that the abolition of the Ministry of Electric Power and restructuring of the power industry and the resumption of "direct power purchase" are key steps in the power reform.Both of them have relaxed the regulation in substantive terms and promoted the development of the power industry and improved efficiency.(IV)This paper constructs a contract electricity trading model for electricity purchase users.The contracted electricity transactions are carried out between the purchasers in the case of excess or insufficient contract power.Under the assumption of the benchmark parameters,the calculation of the electricity purchase users can reduce the respective Cost;the lower the transaction cost and inter-regional power transmission cost,the more transactions can be reduced by the purchase of electricity users,and the transaction will be suppressed when the transaction cost exceeds a certain level.(V)T Through empirical research,the article finds that there is a positive correlation between the spot price of French electricity and the futures price.There is a cointegration relationship between the spot price of French electricity and the futures price.It is verified that there is a mutual guiding relationship between the price of electricity futures and the spot price of electricity,indicating that electricity futures have a price discovery function.The article calculates the hedging rate and hedging performance based on OLS method,B-VAR method,ECM model and ECM-BGARCH model.The results of several methods show that the risk of spot price fluctuation can be avoided by electric power futures hedging.(VI)In the market where power spot trading,forward contract trading and power futures coexist,based on the risk hedging idea,the power plant can hedge the potential risk of the forward contract.With the idea of portfolio model to construct the power generation function of power producers,power producers can allocate electricity to power spot market and power forward contract market under specific income and risk preference constraints.By simulating,it proves that it is feasible and operability,which can help power producers to more scientifically allocate electric energy assets and improve the profitability and risk management level of power producers under the conditions of power marketization.Finally,based on the above research,this paper proposes to speed up the verification of transmission and distribution prices,strengthen the construction of the electricity market system,further enrich the trading varieties,carry out user-side contract electricity trading,develop power futures,improve electricity market trading rules and improve electricity market supervision.It is expected to provide useful quantitative decision-making basis and measures for the development of the power system and the research results have certain theoretical value and practical reference for the healthy development of China's power market operation.