The Design And Application Of Contract For Difference In Electricity Market

The construction of the electricity spot market is an important part of a new round of reforms in China.Under the construction of the electricity spot market,the spot price based on time and location is prone to fluctuation,so it is necessary to design effective tools to avoid such risks.As the most common financial instrument in the medium and long term market,Contract-for-Difference(Cf D)can not only provide market participants with an instrument to hedge against price fluctuations,but also be used by the government to recover the stranded cost,control the market power,and consume the renewable energy.Therefore,it is also an excellent market regulation approach.Most research today focuses on two aspects: market subject strategy based on Cf D and the effects of Cf D on restraining the market power and stabilizing prices.Discussions on the analysis,design and application of Cf D mechanism are lacking.This thesis attempts to reveal and analyze the design of different types of Cf D by addressing the basic mechanism and design elements of the Cf D mechanism,so as to alleviate or even solve certain problems of the market.This thesis studies the design and application of Cf D.Firstly,this thesis systematically sorts out the basic design elements and typical international applications of Cf Ds.The author refines the setting method of design factors such as contract price,benchmark price and contract quantity in Cf D,summarizes and analyzes the typical foreign Cf D in Ontario,UK,Singapore,Australia,etc.And this thesis puts forward some relevant plans and ideas for the establishment of domestic Cf D mechanism.Secondly,the role of the Cf D mechanism in the adjustment of social welfare distribution among different regions in cross-province and cross-region transactions is studied.The thesis i)theoretically analyzes the impact of the adjustment measures such as transmission fees,restricts transaction volume and government-authorized Cf Ds,on the market efficiency and social welfare distribution,ii)designs a government-authorized Cf D contract for hydroelectric units in the sales area,and establishes a bi-level model based on Mathematical Problem with Equilibrium Constraints(MPEC),so as to explore the impact of the proposed Cf D contract on the power generation strategy of the hydroelectric generating units in the sales area.Finally,the role of the Cf D mechanism in the adjustment of welfare distribution among different market entities is studied,and the subsidy of high cost units is discussed in detail.The thesis i)summarizes the current subsidy mechanisms including power subsidies,conventional Cf Ds and fixed cost subsidies,ii)respectively establishes a bi-level model based on MPEC according to the direct subsidies and Clean Energy Supply(CES)contract subsidies,and the calculation results from studying cases under the two subsidy methods show that the CES contract subsidy method has obvious advantages,iii)studies the incentive effects of CES contracts,and relevant ideas are given according to the actual problems of Guangdong gas generating units.