Model Selection and Mechanism Design for Electricity Markets in
Hydropower-Rich Regions: Adaptation Study
Abstract
Most of the first eight pilot regions in China have entered the
long-period continuous operation stage, and the second batch of six
power spot pilots have started their simulation trial runs; however, the
construction of power markets in the hydropower-rich regions of China
(i.e., Sichuan and Yunnan) still faces multiple problems, including poor
reliability of medium- and long-term power supplies, inefficient
hydropower resource utilization and consumption scales, and unstable
market prices. In this study, we establish a multi-scale joint clearing
model for different market models (considering both long- and short-term
operation strategies) and perform simulations of different market models
at different time scales, to compare and analyze their optimization
results and electricity price fluctuations. The model can stabilize the
market price and reasonably reflect the true value of hydropower; it can
also promote the consumption of clean energy and ensure the reliability
of power supplies in the medium and long term. Finally, suggestions are
made regarding the selection of electricity market models, the security
of energy supplies, and the design of sustainable development mechanisms
for hydropower in hydropower-rich regions, with a view to providing
useful references for the development of China’s electricity market.