The Study Of Cost-reimbursement Rules And Price Regulation For Micro-grids Firm

Due to market failure caused by Micro-grids’ positive externalities,government attempts to keep it development healthy by cost-reimbursement rules and price regulation.This paper analyzes a basic trade-off between rent extraction and incentives and the selection of Feed-in tariff.The paper is as follows:First,a cost-reimbursement rules problem under incomplete information is studied,in which the real cost information can’t be obtain by government.Due to the benefit conflict and asymmetric information,we present a principal-agent model as a useful theory of incentives in regulation.The result demonstrates: a fixed price contract for high efficiency Micro-grids firm can avoid the rent-seeking action and a cost-reimbursement contract for low efficiency Micro-grids firm can incentive their development.Second,that micro-grids firm participates electricity market competition is considered,we develop a model consist of a micro-grids firm,a traditional fossil energy companies and the government to discuss the influence of electricity benchmark price,subsidy and social benefit under the fixed price and premium price strategy.The numerical example results show electricity benchmark price and subsidy under premium price strategy is greater than the fixed price strategy,but the same social welfare.Finally,Combined carbon trading scheme with cost-benefit model,we analyze two kinds of operation modes of PV power generation which are unified purchase and sale operation mode and contract energy management mode.Furthermore,we calculated 9 different regional PV clean development mechanism(CDM)project and the result shows the main source of photovoltaic power generation enterprises in China with government subsidies,carbon trading accounted for less than 4%.We suggest turn the subsidy for electricity into the subsidy for carbon and establish national carbon trading market.The paper is useful for government to make guidelines for government draw up reasonable cost-reimbursement rules and feed-in tariff policy.