Mid-and Long-term Contract Decomposition to Promote New Energy Consumption

Abstract

With the increase in China’s new energy installed capacity, the pace of domestic power market reform is also steadily accelerating. Having the feature of randomness, volatility and intermittency which makes power generation fragmented, higher risks occur when new energy generation is involved in spot market. The proposal of a new round of electricity reform also brings great challenges for The Independent System Operator (ISO), including decomposing mid- and long-term contract curve which not only requires consideration of monthly electricity balance but also makes the curve conform with the power forecasting to the greatest extent. The Independent System Operator should formulate reasonable mid- and long-term curve decomposition combined with the signed contracts as well as ensure reasonable and fair income of new energy plants in spot market to increase their enthusiasm in the market in the process of decomposing mid- and long-term contract curve.