Mechanism, Application, and Key Issues of Contract for Difference in Electricity Markets

Monopoly structures and complete control over pricing deform the electric energy environment. An example of the European model of reforming the electricity market, which is based on transparency and consumer accessibility to electricity services, is shown. On this basis, the goals, and vectors of reforming the regional markets of electric energy services have been determined. It is foreseen that the reform process should be carried out on a combination of organizational, economic, technical, social, and other goals. The advantages and disadvantages of reforming the electric power market of the region and the country were identified using the author's SWOT analysis method. The proposed closed cycle of reforming the electricity market covers an interchangeable combination of the following components: regional electricity networks, market environment, information environment, financial and credit support, integration, labor resources, and communication links. Vectors of further reform are outlined. Competitiveness presupposes the free choice of a supplier by consumers in the absence of barriers to the supply and sales market. The new European format of the electricity market model creates new challenges and threats to the operation of electricity market enterprises, which relate to transparent and objective conditions of access to consumption and operation of electricity networks, impartial accelerated development of the electricity market to the requirements of the dynamism of the economic system. Reforming the electricity market combines the processes of achieving organizational, economic, technical, social, and environmental goals. However, this combination causes various consequences and risks associated with profit maximization. One of the most critical problems of the multi-system operator's functioning is ensuring its independence and mutual respect for all market participants. For this, the following measures are legally justified: procurement of related services on a competitive basis; transparent information about the available list of related services, their volumes, costs, terms, and requirements for suppliers; formation of accounting of the expense and income component when implementing the centralization of dispatching management from other types of activity; formation of access to the capacity of interstate electrical networks by conducting electronic auctions; submission of the UES development plan to the CMU of Ukraine for consideration, even in the case of inconsistency between the interested authorities; the investment component of the region will grow only under the conditions of reforming the electricity market. However, the processes of introducing a new model of the electric power services market are being formed under tight deadlines, the introduction and adoption of legislative acts, the implementation of organizational and structural transformations, and software approvals; despite everything, the processes of reforming the electric energy services market are an integral attribute of the region's integral investment policy. Keywords: energy market, energy security system of Ukraine, energy system, energy risks, strategic risks.

In January 2017, The Government of Yunnan Province issued the implementation plan of electricity market reform for retail side. The electricity retail market has officially entered the stage of power market in Yunnan Province. The construction of power retail market is conducive to improving the activity of power market, cultivating the market awareness of power users, promoting power users to improve demand side management ability, and ensuring the safe, economic and efficient operation of power system. According to the official website of Kunming Power Exchange Center Company Limited, at present, there are 146 registered power sales companies and 33062 registered power users in Yunnan Province. The power market transactions are active, the transacted electricity quantity is increasing year by year, and the power retail market is booming. The retail package of electricity is the basis of mutual benefit and win-win between the electricity selling company and the retail users. The flexible, reasonable and effective electric retail package reflects the healthy and efficient operation of the electric retail market to a certain extent. Therefore, the research and development of electric power retail package is a very meaningful topic, which is worthy of in-depth study and practice.Firstly, based on the operation of Yunnan electric power wholesale market and electric power retail market, combined with the business practice of Yunnan electric power retail settlement payment, this paper points out the constraint boundary of the design of electric power retail package in electricity market of Yunnan province, such as the coupling constraints between electric power wholesale transaction and retail transaction, the coupling constraints between electric power wholesale settlement and retail settlement, etc. Then, combined with the characteristics of electricity load, electricity price bearing capacity, demand response and other characteristics, this paper makes a user portrait of Yunnan users, classifies and summarizes the power transaction demand of retail users, and designs the corresponding electric power retail package, such as free service, conditional service fee, price difference income, energy management and other electric power packages, which are full through the appropriate electric power retail package. It can meet the demand of electricity retail users and form a win-win situation. Secondly, this paper introduces the operation mode of all kinds of retail packages in Electricity Market of Yunnan province in detail. On the one hand, it is the business process of transaction and settlement, including the wholesale, retail transaction and settlement business process of power selling company, the transaction and settlement business process of power users, the transaction and settlement business organization flow of power exchange center et al. On the other hand, it is the cash flow and invoice flow of settlement and payment, including the cash flow and invoice flow of retail electricity payment of power users. Finally, through the practical analysis of the operation of power retail market in Yunnan province, it points out the advantages and disadvantages of various packages. Further combining with the construction and development plan of electricity market in Yunnan province, especially the operation of electric power spot market, some changes for the design of power retail package are proposed.

IntroductionThe monitoring of the electricity market and preventing incorrect usage behavior are well-known issues in the competitive electricity market (see for example Marulanda et al., 2006; Nagypal et al., 2015; Strielkowski and Lisin, 2016; Nagaj, 2016) that are well-embedded into the strategy of sustainable energy development (Streimikiene et al., 2016). The monitoring of the electricity market plays a key role in the free electric energy market (Kasperowicz, 2011; Lisin et al., 2016). Supervisory actions are important for the System Operator and the Regulatory Commissions in order to ensure the efficient market performance. For Federal Energy Regulatory Commission in USA (Haymes, 2000), the market monitoring has been identified as a standard market design component and a basic function in the deregulated electricity market. According to Rahimi et al. (2003) and London Economics et al. (2007), the electricity market monitoring could be organized as an internal system or an institution in the Independent System Operators (ISO) structures, as well as could function also outside of the ISO structures and can provide service for ISO or other recipients (Goldman and Lesieutre, 2004).Furthermore, the availability of a well-developed monitoring system would also help agents to optimize their bidding strategies (David and Wen, 2000; Dun-nan et al., 2006; Pires Manso et al., 2015). Currently agents are concentrating on increasing their efficiency in order to maximize profits through a complicated system of product and sales management. Due to the fact that the process of decision making is very complex, whereas complete information is often unavailable, the electricity market monitoring appears to be difficult (London Economics, 2007). Therefore, if the market monitoring system functions properly, the transparency and reliability of the information concerning the electricity market dynamics may be ensured.The main activities of market monitoring as described in Rahimi et al. (2003), London Economics et al. (2007), (Dehdashti, 2005) and (Guler et al., 2005) include: 1) Detection of attempts to exercise market power and fraudulent behavioral, 2) Monitoring of market performance, 3) Identification of market design imperfection, 4) Transmission and generation blackout controlling, 5) Market participants' behavioral monitoring (activities and transactions).After an in-depth analysis of the existing literature devoted to exploring the issue of electricity market monitoring, it is possible to state that the information regarding the general methods of monitoring are available. However, there is a deficit of information related to the monitoring techniques focused on economical parameters of Spanish electricity market. Furthermore, the conducted analyses of the market structure and of the available source data related to Spanish power system have proven that that there is a need for a modification or a creation of new methods and indices, which shall be applied in order to correctly monitor the economical parameters of Spanish electricity market.This paper firstly introduces the concept and functions of the electricity market monitoring system (section I). Subsequently, the main methods and indices applied to the monitoring (market power, market performance and behavioral monitoring) are outlined (section II). Section III outlines the particularities of Spanish market. Subsequently, section IV presents conclusions.1. The global overview of the monitoring systemThe result of the extensive analysis of the existing literature on market monitoring is represented graphically in Figure 1.The Figure 1 presents the market monitoring framework: the elements and the correlation between them. This extensive analysis is based inter alia on the following sources: London Economics et al. (2007), Goldman and Lesieutre (2004), Dun-nan et al. (2006), Chakrabarti et al. (2008), Newbery (2004), Asgari et al. …

This paper evaluates the economic impact of the introduction of customer-owned thermal storage air-conditioning (TSA) systems in a deregulated electricity market from the viewpoint of the load service entity (LSE) and the whole-trade cost in the electricity market. Using market electricity demand and market clearing price (MCP) data based on the California Electricity Market 1999, our numerical results indicate that the LSE reduced the purchase cost of electricity at the MCP through the load managements of customers by operating TSA-systems instead of conventional air-conditioning (AC) systems. The introduction of customer-owned TSA-systems also reduced the variation of the MCP by shifting total market demand from on-peak to off-peak hours, and reduced the whole-trade cost in the electricity market. Thus, this paper provides the customer-owned TSA-systems contribution to the reductions in the purchase cost of the LSE and the whole-trade cost in the electricity market.

In electric power market, the research of best bidding price is an important study, in which the calculation and description of node price is the key issue. Based on the highly effective ant colony algorithm, this paper proposes a methodology of best bidding for solving the optimal price model of the electric power market. We use the random global search capability of ant colony algorithm to deal with the constraints of power system operation and solve the optimization problem between power producers bidding and consumers demand, to estimate the wholesale or retail price in the electricity market. Finally, we use the IEEE 30 - bus test system as a pilot system to test the proposed methodology, and the test results and analysis show that the computational model has a certain degree of practical significance in our electric power market.

The article describes features of the electricity market, determined by the specificity of the circulating product. It is shown that electricity as a specific product, which is characterized by the demand inelasticity, continuity of the production and consumption processes, impossibility of accumulation and storage, standardized product range, etc., determines the basic characteristics of the electricity (power and capacity) market. Herewith, capacity can be considered as a related product. The level of competition in the electricity market is largely dependent on the presence of restrictions in the choice of markets; differentiation of the products; choice of fuel resources and their suppliers. In addition, an essential condition for the electricity market operation is the availability of a related infrastructure. The main electricity market models are described, which have been practically implemented in the world: the markets, in which only electric power is sold, the markets with capacity turnover, and the markets differentiation depending on the model of their organization. A brief description of the structure of the domestic market of the countries demonstrating the successful experience of the electricity market operation is provided. At the same time, a distinctive feature of the current Russian electricity market is the incompleteness of its architecture, difficulties in ensuring its competitiveness due to the allocation of a minimum number of price zones, which are characterized by a large number of suppliers and purchasers of electricity, a developed grid infrastructure. In addition, the so-called non-price zones, in which the prevailing conditions hinder organizing a full-fledged market economy, are highlighted. The conclusion about the need for further study of the electricity market operation in different regions in order to make use of the positive experience is made. DOI: 10.5901/mjss.2015.v6n4s4p190

IntroductionThere are a lot of factors that influence the efficiency of efforts preventing criminal offences of an economic nature; these factors include networking of stakeholders (e.g., Akhmadeev and Manakhov, 2015; Ala-Juusela et al., 2014; Aleksejeva, 2016; Barberis et al., 2014; Branten and Purju, 2015; Cirjevskis, 2015; Cuneo et al., 2014; Fuschi and Tvaronaviciene, 2016) and level of development of country (e.g., Corneliu, Tamosiuniene, 2015; Balitskiy et al., 2014; Balkyte and Tvaronaviciene, 2010; Dudzeviciute et al., 2014; Lapinskiene et al., 2013; Lapinskiene et al., 2014; Bialowqs, 2015; Pires Manso et al., 2015; Balitskiy et al., 2016). The list of factors could continue much further, but suffice it to summarize that they are often categorized into soft, or indirect, factors, and hard factors, together encompassing all mechanisms of enforcement, from legislation to punishment of crimes. Taking into account the complexity of the phenomenon itself, we want to delineate the context of our research.The energy security of a country involves a number of different facets, such as energy availability, efficiency, and afordability (Cherp and Jewell, 2014; Dezellus et al., 2015; Lisin et al., 2015; Espona, 2016); level of techology novelty and its vulnerability (Grubicka and Matuska, 2015; Prause, 2016); public sector performance (Bileisis, 2014; Borshchevska, 2015; Caurkubule, Rubanovskis, 2014; Garskaite-Milvydiene, 2014; Lauzikas et al., 2015); and available means to enhance social security (Bileviciene and Bileviciute, 2015; Bistrova et al., 2014; Dzemyda and Raudeliuniene, 2014; Tvaronaviciene et al., 2015). In addition to these, behavioral patterns also undeniably affect a country's energy security.To determine the significance of criminal offences in electric power engineering services in Latvia and to evaluate the efficiency of solutions therefor, the authors of this research developed a questionnaire targeting specialists from various sectors in Latvia: law enforcement institutions (police and prosecutor's office) and employees of energy companies (JSC Latvenergo, JSC Sadales tikls). These specialists represent the population of the empirical research. The questionnaire was conducted electronically (http://aptaujas.du.lv/index.php/813329/lang-lv), and the responses served as the data for this empirical research.Research hypotheses were formulated taking into account various factors that influence criminal offence in electric power engineering services: fraud icentives (Girunas and Mackevicius, 2014; Giriuniene, 2013; Isoraite, 2013; Lace et al., 2015; Lauzikas and Mokseckiene, 2013); technology (Gerlitz, 2016; Guruz and Scherer, 2014; Ignatavicius et al., 2015; Jefremov and Rubanovskis, 2015; Iganatavicius et al., 2015; Grubicka and Matuska, 2015; Rezk et al., 2015; Prause, 2016); perceptions of energy security (Miskinis et al., 2013; Mânsson et al., 2014; Raudeliuniene et al., 2014; Leonavicius et al., 2015; Narula and Reddy, 2015; Njaramba et al., 2015; Oganisjana and Surikova, 2015); and risk awareness (Ruza et al., 2016). Authors put particular emphasis on enforcement efficiency. Therefore, the following hypotheses were formulated:* Protection of electric energy market through criminal law is important and topical both for energy supply companies and police officers.* There is a necessity for legislative framework modernization in order to prevent criminal offences in the electric energy market.* An appropriate provision of police resources is necessary to prevent criminal offences in the electric energy market and to ensure effective protection of the said market.* There are differences in the evaluation of the efficiency of various groups of measures used to resolve criminal offences in the electric energy market.* There is interdependence between the evaluation of the problem of illegal usage of electric energy and the effective application of various groups of measures to solve the problem. …

The whole electric power system includes four aspects: generation, transmission, distribution and electricity users. Those four aspects all need maintenance to enhance system reliability and energy efficiency. Under deregulated electricity market, generating unit maintenance scheduling arrangements are very different with the traditional electric power system. In the tradition electric power industry, dispatch agencies unified formulate maintenance scheduling which is not suitable for the electric power market mechanism. Generation maintenance scheduling that is determined by the power companies themselves may pose a threat to the reliability of the system. And the main purpose of transmission line maintenance is to ensure electricity delivery and avoid wasting of energy. Under the electricity market, the transmission line maintenance scheduling needs to cooperate with generation maintenance scheduling and distribution equipment maintenance scheduling. On the basis of the previous research, this paper mainly studies the generation and transmission maintenance scheduling under electricity market, describes the impact of electricity market on transmission maintenance scheduling and focuses on the model of coordination optimization of generation transmission maintenance scheduling.

Under China's dual strategic goals of " carbon peak in 2030 and carbon neutral in 2060 ", the carbon market and electricity market play important roles.The national carbon emission allowance (CEA) market has been launched, and the road map for the development of a unified national electricity market has been clarified.This has a profound impact on the energy and electricity industry, and there is an urgent need for in-depth research on the coupling mechanism and coordinated development of the electricity market and carbon market.This article adopts the system dynamics (SD) method to design and simulate the coupling mechanism between two markets, and analyzes the market coupling effect and performance under different carbon emission levels and carbon reduction policy intensities.The results show that (1) the carbon market affects the profitability of power generation enterprises through the cost of carbon emission reduction, and the carbon price signal can be effectively transmitted to the electricity market.(2) The electricity market is not as sensitive to the intensity of carbon reduction policies as the CEA market.(3) The higher the intensity of carbon reduction policies, the lower the final level of carbon prices.Therefore, it is recommended to implement a time of use electricity pricing mechanism according to local conditions, guide electricity prices to tilt towards the cost of power generation, and moderately enhance the profitability of power enterprises.In addition, the intensity of implementing carbon emission control policies should match the development of the industry and should not be too aggressive.

This chapter contains sections titled: Game Theory and Its Applications Electricity Markets and Market Power Market Power Monitoring, Modeling, and Analysis Application of the Equilibrium Models in the Electricity Markets Solution Techniques for MPECs Solution Techniques for EPECs Technical Challenges for Solving MPECs and EPECs Software Resources for Large-Scale Nonlinear Optimization References

Under the goal of carbon peak and carbon neutral, it is of far-reaching significance to focus on the coordinated trading mode design of the Vehicle-to-Grid subjects in the electricity market and carbon market. However, there are few researches on the Vehicle-to-Grid subjects participating in the trading mode of electric carbon market by predecessors. Therefore, this paper, by combing the basic connotation of the Vehicle-to-Grid subjects, designs the trading mode of the Vehicle-to-Grid subjects in the electricity market and the carbon market, and further discusses how to get through the coordinated trading mode of the Vehicle-to-Grid subjects in the electric carbon market. In this way, relevant suggestions are given to strengthen the technical support of the Internet of Vehicles platform and improve the market trading mechanism.

In order to promote the consumption of renewable energy under the market environment, the virtual power plant (VPP) integrates distributed wind power, photovoltaic generator, energy storage system, controllable load and other dispatchable resources to participate in electricity market as a whole. Meanwhile, VPP can participate in the carbon emissions trading market (CETM) to improve its environmental benefits. At present, few articles study the bidding strategy of VPP for multiple markets, and the specific current market mechanism in China was also not considered. To solve the above research gap, aiming at the optimal operation of VPPs facing the day-ahead electricity market (DAEM), real-time electricity market (RTEM) and CETM, a two-stage bidding strategy of VPP is established to maximize its revenue while minimizing its operational risk. This paper adopts CVaR as the risk measurement index to quantify risks caused by uncertainties of wind power output, photovoltaic output and electricity price. When developing the bidding strategy, consider the deviation electricity tariff settlement mechanism (DETSM) in China's current electricity market operation mechanisms, and analyze its impact on VPP's revenue. Finally, an example is given to verify the effectiveness of the proposed bidding strategy.

Construction of Electric Spot Market has recently begun in China. The coexistence of planned economy and market economy in the electricity market may not change in a short time. Determining the unbalanced funds caused by the settlement of planned economy in the spot market is essential, this paper proposes and analyzes the advantages and disadvantages of three settlement methods in the spot market under the integration of planned economy and market economy. This paper emphasizes on the analysis of unbalanced fund caused by the planned economy in the spot market settlement. The different results of one-time and twice settlement of planned economy on unbalanced settlement in the spot market are discussed, and suggestions to the development of Electric Spot Market in China are proposed.

The formation of common industrial markets of the Eurasian Economic Union (EAEU) in the energy sector is not just a task to fulfill the terms of the Treaty on the EAEU, but a necessary condition for expanding integration interaction between partner countries, a necessary resource platform for developing competitive potential in the industrial sector of the EAEU member countries and a factor for ensuring energy security The formation of common industrial markets of the Eurasian Economic Union (EAEU) in the energy sector is not just a task to fulfill the terms of the Treaty on the EAEU, but a necessary condition for expanding integration interaction between partner countries. It’s a necessary resource platform for developing competitive potential in the industrial sector of the EAEU member countries and a factor for ensuring energy security The authors examine in the article the world experience in applying various models for integrating energy markets, in particular electricity and gas, taking into account the specifics of the functioning of the sectoral national systems of the EAEU countries, their resource potential, the level of development of competition and monopolization, and the possibilities of transit of electricity and gas. The potential of creating and developing a common electricity market on the basis of the signed agreements in the EAEU was studied in the context of differences in the institutional and legal bases, the degree of development of competition in the national industrial electricity markets, and their liberalization levels. The revealed differences in the models of the national electricity markets of the EAEU countries cause a long transition period for the formation of a common market with a gradual decrease in the number of seizures in generation / production, transmission and ensuring the security of energy supply to countries. It is noted, that the coordinated model of the transition period does not contribute to the rapid obtaining of significant synergistic effects and the solution of energy redundancy problems. The need to develop a coordinated industrial policy of the EAEU countries to expand the use of resource potential and export of energy resources to third countries is noted. It requires an integrated approach to creating common markets, primarily electricity and gas. (можно дать одним предложением The need to develop a coordinated industrial policy of the EAEU countries to expand the use of resource potential and export of energy resources to third countries is noted, which requires an integrated approach to creating common markets, primarily electricity and gas., а можно оставить и так)The current level of the institutional and legal basis for the formation of the gas market does not allow to overcome the differences in the degree of liberalization of national gas markets, their monopolization and, accordingly, pricing, and determines the acceleration of integration rapprochement. The formation of common markets actualizes the format of exchange trading, the institutionalization of which on the electricity market is already provided for in the EAEU interstate agreements, and on the common gas market requires coordination and implementation of electronic trading mechanisms, drawing on Russian experience.

With the increasing utilization of natural gas-fired power plants, efficiency and even reliability challenges on both industries arise from the growing reliance on natural gas as fuel in the electricity sector and the increasing demand fluctuation in the natural gas sector. Following a brief review of the discontinuities, improvements are discussed to coping with the desired timely and cost-effectively gas supply in the electricity day-ahead market scheduling. Inspired by its successful implantation in the electricity market, the locational marginal pricing mechanism is applied to the natural gas day-ahead market. Moreover, the bidding strategy for general gas demand utilities is provided while considering the potential applicability of demand response (DR) which is also practiced in the electricity market. The formulations are represented as bilevel problems of each corresponding market, of which upper level problems maximize the participants' profit, while the lower level problem renders the market clearing with schedules and locational marginal prices. Then, a coevolutionary algorithm is proposed to find the equilibrium of the two coupled markets with integrated participants. Results show that the proposed methodology with synchronized intraday time intervals and DR abilities could provide higher efficiency for the natural gas market, which will help the electricity market better coordinated to provide flatter price signals while scheduling more renewable energy sources.