Comparative Study Based On Game Theory Generation Market Pricing

With the experiment and extension of China' s electricity industry reform, the problem of electricity power pricing, especially in the power-generation sector, is playing a crucial role to the success of the reform, and is becoming more and more important as a task which is concerned either by the researching area or by the administration. Therefore it is of great value theoretically and practically to make it clear the differences between different pricing methods in the power-generation sector.This paper discuss the difference between three pricing methods, viz., administrational pricing, contractual pricing and competitive pricing in power generation sector, after referring other researchers' works, and gaining the basic knowledge about different pricing methods in the power generation sector from individual visiting and mass investigating. After this, it leads in Game Theory as the method of analysis and present three models based on the theory. With the models, the paper describes the behaviors and strategies of Independent Power Plant under three pricing methods, as well as comparing the different economic effects produced under different pricing methods. Some real data are then used to test the authenticity of the conclusions.The main conclusions of the paper is :(l)The economic and social results under different pricing methods whichare based on different gaming rules are different. (2)Economic and social results under Administrational pricing method isnot good, because it is difficult to produced a reasonable price. Itis relatively different for contractual pricing and competitive pricing. General speaking, the price produced under contractual pricing method is usually stable, and the risk of operation in the power generation sector is therefore low, while the price produced under competitive pricing method is easy to fluctuate.(3) In the present electricity power reform, we should consider contractual pricing as the first choice, and Independent Power Plants should be encouraged to supply electricity power to big electricity power users. Meantime, we should gradually create more and more conditions to take competitive pricing as the pricing method.