Fuzzy Comprehensive Evaluation of Trading Regulatory Risk for a Unified and Interconnected Electricity Market in China

Abstract

Trading regulatory risk arises prominently in the preliminary formulation of a unified and interconnected electricity market in China. Risk indices, evaluation models and methods as well as index weights are three important aspects of a comprehensive trading regulatory risk evaluation. In this paper, firstly, on the basis of the current electricity market environment in China, systematic trading regulatory risk indices used to quantify the risk level of the unified and interconnected electricity market are established. Secondly, evaluation models and a evaluation method of the trading regulatory risk are developed on the basis of synthesis of fuzzy inference and analytic hierarchy process (AHP). The fuzzy set approach is employed to identify the membership degree of each index to various risk levels, while the AHP is used to acquire the weights of the proposed trading regulatory risk indices. Finally, a simulation based case study on the trading regulatory risk evaluation is presented to illustrate the effectiveness of the proposed indices and the evaluation method.