Designing and analysis of index-based long-term electricity market contract considering recent surge of coal price in China. (November 2022)

• Record Type: Journal Article
• Authors: Liu, Yifeng; Tang, Yang; Gao, Xiong; Wan, Jing; Wu, Junhui; Zhang, Yuxin
• Is Part Of: Energy reports. Volume 8(2022)Supplement 8
• Page Start: 29
• Page End: 39
• Publication Date: 2022-11
• Subjects: Coal price index contract -- Electricity market -- Transaction risk; Power resources -- Periodicals; Energy industries -- Periodicals; Power resources; Periodicals; Electronic journals; 621.04205
• DOI: 10.1016/j.egyr.2022.09.083
• Languages: English
• ISSNs: 2352-4847

Abstract

Abstract: Under the background that the spot market has not yet been fully established, the risk of coal price fluctuation lacks an effective mechanism to transmit to users. During the period of high coal prices, coal-fired units suffered serious losses and the willingness to generate electricity declined extremely, which was not conducive to the stable growth of the national economy. To solve the above problems, after investigating domestic and foreign solutions, this paper conceived a designing idea for the index-based long-term electricity market contract suitable for the current electricity market. Based on the actual data from a province in China, the specific parameters of index-based contract were designed and the profit of units were analyzed. The results show that the profit fluctuations of the coal-fired units will be significantly reduced after the trading contract adopted. In the end, the key issues of trading contract and the impact on market entities were discussed.