Studying On Distribution Price Model Under The Market Separation Between Transmission And Distribution

The purpose for reforming electric power is to realize complete competition in generation, transmission, distribution and demands. Competing in distribution and opening distribution network has been a keystone in the process of power markets. It is most important to study distribution price model under the market separation between transmission and distribution for accelerating power reform and promoting order and healthy development of power market. This paper first formulates the present status of developing power markets and price theories in our country and foreign countries, and expounds the main works in this paper. Then, this paper presents the theory base for studying price model, detailed analyzing two pricing methods for transmission and distribution pricing which are embedded costs pricing method and marginal costs pricing method, and compares their merits and deficiencies in detail. At the same time, the paper also analyses economic characteristic of distribution network, illustrates that distribution company must be regulated by regulator and presents current regulation methods in our country and foreign countries.This paper focuses on analyzing distribution company costs and sorts them into two types, which are fixed costs and variable costs. Then an integrating pricing method is being presented, for distribution company, that applying embedded costs pricing method in fixed costs and according to maximum demands to allocate while applying marginal costs pricing method in variable costs and allocating them by spot prices. Integrating the two sides effectively, we acquire distribution price model. The model may be called nodal price model based on integrating pricing method, which can be applied in any of spot, time-of-use, and future contract electricity price. This paper, in which, specially presents the allocation foe distribution network and proposes a transaction-loss matrix to allocate distribution losses and their costs.Next, this paper analyzes each regulation method and its applicability for our power market environments, particularly for the market separation model between transmission and distribution, then proposes a price regulation model for distribution company based on optimum combination. This method is based on efficient combination for benchmark regulation, price cap regulation and incentive and penalty excitation mechanism, considering the differences not only in standards of consumption and price indices, but also in scales and environments of each area. At the meantime,this model integrates with price cap method and introduces incentive and penalty excitation mechanism, promoting distribution company effectively to reduce its costs and increase its efficiency, and intensifying mutual competition for each distribution company in the same province. The model is not only applied to the price regulation for distribution companies in the same province, but also to distribution companies in the larger region.At last, this paper generalizes the price model established by distribution company itself and the price regulation model set up by regulator, then proposes a integrating price model for distribution company. The model not only considers the price model established by distribution company itself, but also includes the price regulation model set up by regulator. This paper also presents some examples, demonstrating the application of the price model.