Research On Large-scale Small Hydropower In Electricity Market

Small hydropower (SHP), as an important renewable energy (RE) and one of the key supporting energies in power industry and energy strategy, is now facing the bottleneck of disordered development, imperfect system and low utilization. These issues lead to abandoned water which results from limited transmission capacity, and it is urgent to find breakthrough to increase the utilization of RE. Meanwhile, China is experiencing another power industry reform which focuses on building electricity market, so it is of great importance for SHP to break the bottleneck of development through market. This paper analyzes the difficulties for SHP to participate in the electricity market according to multi-characteristics of SHP, and studies the following three aspects:increasing the reliability of generation capacity forecasting for SHP, designing a proper trading and settling mechanism for SHP to participate in the electricity market.Firstly, it is extremely difficult to forecast the generation capacity for SHP, and there will be a higher risk for SHP to participate in the market, because of its wildly distribution, poor self-regulation and lack of effective forecasting model. Therefore, this paper presents a new method based on the combination with weighted Markov chain and Grey forecasting model to improve the reliability of generation capacity forecasting. The numerical results show that it is effective to reduce the risk for SHP in the market.Secondly, based on the characteristics difficulties of SHP, two trading mechanisms for SHP to participate in the market are given. The first mechanism is a direct one, based on the principal-agent mechanism; SHP participates in the market as a SHP group. It is helpful to reduce the risk, to lower the complexity of the market and to alleviate the issue of raising cost for SHP. The second mechanism is an indirect one; SHP participates in the market through price adjustment mechanism. SHP can benefit from market orientation and avoid the competition and other tough issues in the electricity market at the same time.Finally, a practical settlement mechanism for SHP is designed. It takes bidding results as actual revenue, which makes the market operation of SHP a closed loop. To simplify the settlement process, improve flexibility and connect with market participation, this paper proposes a province-group settlement mechanism. The province settlement mechanism is the settlement between Power Exchange and agents who represent SHP groups. The group settlement mechanism is the settlement between agents and SHPs, and it can take the advantage of complementary of SHP to reduce penalty and risk. Numerical results show the effectiveness of the province-group settlement mechanism to improve the long-term profit for SHP groups and any single SHP.