Research On Risk Management Of Wind Power Investment And Participating In Electricity Trading

As China’s economic is still developing rapidly, energy supporting is needed greatly in the future. With the decreasing in fossil energy, the contradiction between China’s economic development and energy supporting will aggravate continuously. It is common view that rapid developing renewable energy such as wind power is the way to relieve energy shortage and keep economy increasing fast and sustainable. As renewable energy such as wind power is clean and sustainable, it is significance for energy sustainable development, reducing CO2emission, relieving greenhouse effect. Recently, China’s wind power is developing very fast, but resistance risk of wind power projects is so weak for the randomness and intermittent of wind power. So it is important to study risk management of wind power investment for reality.Since1980’s, countries around the world began to break the monopolistic electric industry and open the electricity market. The electricity market can improve the transporting efficiency through competing and market mechanism to optimize and distribute resource. Recently, China has began to reform the electricity market, to start build regional electricity market to bidding. Electricity market is China’s reforming direction of electric industry to improve the efficiency of resource distribution and electricity producing. So it is prospective to study the risk management of wind power participating in electricity market for China’s wind power developing healthily and sustainably.Beginning with the theory of risk management, the investment of wind power is analyzed. In the view of financial risk management, the risk of wind power investment is assessed based on risk-at-value and conditional risk at value. The validity of the model is demonstrated. The risk of wind power participating with the electricity market is analyzed in the giving electricity market rules. The risk is assessed based on the utility function. Numerical results show that utility function can provide better risk management choice than expected value and mean variance.