Abstract
Under the background of economic development, energy security and environmental demands, the development of clean and low-carbon energy has promoted natural gas and non-fossil energy to become the main direction of world energy development. China’s natural gas consumer market has wide seasonal peaks and valleys. Because China’s natural gas peak shaving practices have some problems, we concluded that interruptible gas management has become a viable short-term emergency peak shaving method for natural gas systems in the transition period. In this paper, we take Shaanxi Province as an example. From the perspective of option pricing, this paper explains the method of using interruptible gas management to deal with the short-term supply and demand imbalance of natural gas. Therefore, we propose an interruptible gas contract trading mode, discuss the content of the interruptible gas contract and the relevant market organization form, and try to use the Black–Scholes model to calculate the option price of the interruptible gas contract. Finally, based on the price of interruptible gas and the option price of the interruptible gas contract to meet the maximum capacity shortage constraint, a provincial natural gas pipeline network company’s optimal purchase model for the interruptible gas was established, and the model was solved using the dynamic queuing method. The results show that the interruptible gas contract can not only reduce the market risk of the provincial natural gas pipeline network company and maintain the stable operation of the gas pipeline, but also reduce the cost of the interruptible users and make up for gas shortage losses.
Highlights
In the long-term adjustment of the energy structure, natural gas has gradually become the primary energy source due to five factors: Policy, resources, technology, facilities, and market [1]
When the gas price is lower than the interruptible gas price, the gas is supplied to the user normally. This is equivalent to when the real-time gas price exceeds the interruptible gas price, that is, when the system is in short supply, the provincial natural gas pipeline network company will buy back the natural gas that has been sold to the user according to the interruptible gas price, and the gas supply will be interrupted, so as to increase the virtual natural gas supply in this period
Due to the occurrence of emergencies, the price of natural gas may fluctuate violently, which is difficult for market participants to accept, so it is inevitable that natural gas options as a risk management tool appear in the natural gas market
Summary
In the long-term adjustment of the energy structure, natural gas has gradually become the primary energy source due to five factors: Policy, resources, technology, facilities, and market [1]. “Gas shortage” specific performance: During peak gas usage hours, users’ excessive demand for natural gas results in low air pressure in the pipeline network, causing many users to use gas normally. This is not a phenomenon unique to the winter of 2017. How to introduce IGM into China’s natural gas market and how to design the content and trading mode of the interruptible gas contract are the key issues of this paper.
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
