In the rapidly evolving landscape of China’s electricity market, a groundbreaking study led by YANG Kaitao from the College of Information and Electrical Engineering at China Agricultural University, in collaboration with researchers from Zhejiang Electric Power Trading Center Co., Ltd. and China Electric Power Research Institute, is set to redefine how medium- and long-term electricity transactions are conducted. Published in the esteemed journal *Shanghai Jiaotong Daxue xuebao* (Journal of Shanghai Jiao Tong University), this research introduces a novel continuous centralized auction mechanism that could significantly enhance market efficiency and fairness.
The study addresses a critical gap in the current intra-provincial medium- and long-term electricity market, which relies on a pre-security assessment clearance trading mode. This traditional approach falls short of meeting the demands of a continuously open market and high-frequency trading requirements. YANG Kaitao and his team have developed a continuous centralized bidding trading mechanism and clearing model that not only supports daily continuous trading but also incorporates the available transmission capacity to ensure the enforceability of trading results.
One of the most innovative aspects of this research is the establishment of a Marginal-Vickrey-Clarke-Groves (MVCG) mechanism. This mechanism ensures the balance of payments and quantifies the contribution of market entities through a market efficiency coefficient. “By distributing market value based on the marginal clearing price, we encourage market participants to declare true price information, fostering a more transparent and efficient market,” explains YANG Kaitao.
The practical implications of this research are profound. For power generation enterprises and power users, the new mechanism promises a more equitable and efficient trading environment. The study’s simulation analysis, based on real trading data from a central Chinese province, demonstrated a clearing price of 399.64 yuan/(MW·h), validating the effectiveness and feasibility of the proposed mechanism.
The commercial impacts for the energy sector are substantial. A continuously open market with high-frequency trading capabilities can lead to better price discovery, reduced transaction costs, and increased market liquidity. This, in turn, can attract more participants and foster a more competitive market environment. As YANG Kaitao notes, “Our research aims to bridge the gap between theoretical models and practical applications, providing a robust framework for the future of electricity market transactions.”
The introduction of this mechanism could also have broader implications for the national unified electricity market system. By enhancing the efficiency and fairness of medium- and long-term electricity transactions, it paves the way for a more integrated and resilient energy market. As the energy sector continues to evolve, the insights from this research will be invaluable for policymakers, market operators, and stakeholders seeking to optimize market performance and ensure a sustainable energy future.
In the words of YANG Kaitao, “This research is not just about improving market mechanisms; it’s about creating a more equitable and efficient energy ecosystem that benefits all participants.” With the publication of this study in *Shanghai Jiaotong Daxue xuebao*, the stage is set for a new era in electricity market transactions, one that promises to reshape the energy landscape in China and beyond.