Long-term Contracts Research Articles

Determinants of the Relationship between Wholesale and Retail Energy Prices in the Czech Republic

Rising energy prices have become a focus of interest for politicians at the international, European, and national levels. Energy prices are the main determinant of profitability or even the existence of the industrial sector. So, it is accepted that energy policy aims to ensure a secure, sustainable, competitive, and affordable energy supply for households and businesses. However, the recent geopolitical situation has significantly affected the energy policy of the European Union, raising concerns about energy security and an energy crisis. This crisis has had social, economic, and political consequences, including energy poverty. In this context, it is essential to understand the determinants of the relationship between wholesale and retail energy prices. This paper presents a model proposal to be used by the Czech Energy Regulatory Authority. The model of average retail prices depends on the type of contract - spot or forward, with the three-year forward contract having the largest weight on the retail price. Therefore, our study shows that long-term contracts significantly impact retail energy prices, highlighting the importance of regulatory monitoring of market strategies. Methodologically, the model is based on a multivariate regression analysis solved with the least absolute deviations and data for the period 2012 to 2023. The findings of the study contribute to a better understanding of the complexity of the dynamics of energy prices and support policymakers while attempting to ensure energy affordability and sustainability.

ЕНЕРГЕТИЧНИЙ РИНОК УКРАЇНИ : СТВОРЕННЯ УМОВ ДЛЯ ЕФЕКТИВНОГО ЕНЕРГОЗАБЕЗПЕЧЕННЯ

The article analyzes the theoretical foundations of the formation of energy security on the energy market of Ukraine in the context of European integration processes, and states that energy security is a component of the state's national security. The main advantages of long-term contracts for all energy market participants are indicated. Features of the functioning of consumer companies in the competitive market are highlighted. The main risks for large consumers when working on the day-ahead market are presented. Factors of the expediency of functioning on the balancing segment are given. Current trends in the development of world energy and their impact on energy security are analyzed. The necessity of diversification of energy supply sources for Ukraine is substantiated. The influence of the European integration processes on the reform of the energy sector of Ukraine is studied. The current state of the energy market was analyzed, and the analysis of factors affecting development trends and ensuring protection in the energy market was carried out. The influence of the European integration processes on the reform of the energy sector of Ukraine is studied. The conjuncture of the energy market of Ukraine is determined, in which it is necessary to analyze not only the peculiarities of the domestic sphere, but also the influence of international relations, international trade and the world market. The PEST analysis of the energy industry of Ukraine is presented, which allowed to identify the level of influence and the neighborhood of the group of influencing factors on the formation of the strategic potential of the energy market of Ukraine. Directions for increasing the level of energy security through modernization of the energy infrastructure, development of renewable energy sources, and integration into the European energy space are proposed. It is noted that the creation of conditions for the effective use of internal resources and the development of appropriate technologies are of strategic importance. The country's government is working on integration into the European energy community, which requires compliance with European standards and the implementation of effective management models of the energy market of Ukraine. According to the results of the strategic potential of the energy industry of Ukraine, economic factors exert the greatest influence - 1.147, which just emphasizes the important role of the energy industry in the country's economy. In second place in terms of influence are political factors - 0.847. The analysis of the market just showed the rather important role of the political component in the functioning of the energy market of Ukraine, namely in the aspect of its joining the European energy market and the transformation of Ukraine into the European Union with the rights of an equal state. In third place are technological factors - 0.553, which confirm Ukraine's determination to decarbonize the energy market. And the fourth place is occupied by socio-cultural factors - 0.537, which are only marginally inferior to technological factors. This indicates a strong influence of consumer preferences when choosing interaction models in the market.

Enhancing bargaining power for energy communities in renewable power purchase agreements using Gaussian learning and fixed price bargaining

Power purchase agreements aim to secure long-term contracts between sellers and buyers, particularly in renewable energy transactions. However, successful negotiations for a fixed long-term price and energy volume while ensuring maximum utility for stakeholders remains a significant challenge. This paper introduces a comprehensive model for negotiating 24/7 power purchase agreements, focusing on hourly pricing to address deficits and surpluses throughout each day of the contract timeline. The model incorporates demand flexibility through battery storage, settling on the strike price using Nash Bargaining theory and optimal management of energy consumption relative to market price fluctuations. A soft margin support vector machine classification model determines the buyer’s maximum acceptable price. Moreover, Gaussian process classification is employed to calculate a probabilistic, risk-adjusted strike price, enabling a data-driven approach to power purchase negotiations. The proposed model’s performance is demonstrated through a detailed case study of Norway, illustrating how demand flexibility can significantly lower long-term power purchase agreement contract prices. The analysis of yearly price trends indicates that incorporating flexibility resources in long-term energy contracts may lead to a reduction in strike prices by around 25%. Moreover, such flexibility enhances demand-generation matching, thereby increasing renewable energy transactions within such agreements.

Analysis of the Prices of Recycling Byproducts Obtained from Mechanical–Biological Treatment Plants in the Valencian Community (Spain)

Municipal solid waste (MSW) management in Spain, particularly in the Valencian Community, heavily relies on mechanical–biological treatment (MBT) plants followed by landfill disposal. These MBT facilities utilize mechanical processes like shredding, screening, and sorting to segregate recyclables (metals, plastics, paper) from organic material and other nonrecyclables. While public funding supports these plants, private entities manage them through complex, long-term concession contracts. This structure restricts access to crucial data on the sale prices of the byproducts generated during MBT. Publicly available information on relevant company and administration websites is typically absent, hindering transparency surrounding byproduct revenue. This study addresses this gap by analyzing 2012’s available data on revenues obtained from byproduct sales following mechanical treatment at MBT plants within the Valencian Community and comparing them with Spanish national data. This research revealed a significant finding—the statistical distribution of average prices obtained from Ecoembes auctions in the Valencian Community mirrored the corresponding distribution for prices calculated from auctions conducted in other Spanish regions. This suggests a potential uniformity in byproduct pricing across the country. It has also been found that none of the analyzed price distributions exhibited a normal (Gaussian) distribution. The findings also highlight the need for alternative pricing models that move beyond simple averages and account for regional variations and outliers. As actual prices are not available after 2012, this lack of transparency poses a challenge in comprehensively evaluating the economic viability of MBT plants. Furthermore, it raises concerns regarding whether the revenue generated from byproduct sales reflects fair market value. Limited public access to this information can potentially indicate conflicts of interest or inefficiencies within the waste management system.

Physical vs Virtual corporate power purchase agreements: Meeting renewable targets amid demand and price uncertainty

Power purchase agreements (PPAs) have become an important corporate procurement vehicle for renewable power, especially among companies that have committed to targets requiring a certain fraction of their power demand be met by renewables. PPAs are long-term contracts that provide renewable energy certificates (RECs) to the corporate buyer and take two main forms: Physical vs Virtual. Physical PPAs deliver power in addition to RECs, while virtual PPAs are financial contracts that hedge (at least partially) power price uncertainty. We compare procurement portfolios that sign physical PPAs with ones that sign virtual PPAs, focusing on fixed-volume contracts and emphasizing uncertainties in power demand and the prices of power and RECs. In particular, we first analyze a two-stage stochastic model to understand the behavior of procurement quantities and costs when using physical and virtual PPAs as well as variants that limit risk. We subsequently formulate a Markov decision process (MDP) that optimizes the multi-stage procurement of power to reach and sustain a renewable procurement target. By leveraging state-of-the-art reoptimization techniques, we solve this MDP on realistic instances to near optimality, and highlight the relative benefits of using PPA types to meet a renewable target. We underscore a trade-off between expected cost and cash flow variance that buyers should consider when choosing between physical and virtual PPAs. Moreover, advanced reoptimization techniques significantly impact the ability to manage this trade-off.

A anualidade orcamentaria e os projectos de defesa: a caso basileiro.

This article presents the failures, causes and effects of the principle of budgetary annuality on multi-year defense projects. According to CF/88 and Law nº 4,320/64, budget forecasts and authorizations coincide with the calendar year, with estimated revenues and expenses for the period from January 1 to December 31 of each financial year. However, there is no multi-year instrument that supports or provides minimum budgetary guarantees for the continuity of long-term contracts signed in the defense sector. The four-year Multi-Year Plan (PPA) has historically been a law that quickly falls into disuse, mainly due to the fact that it does not have solid fiscal bases and is not mandatory. Thus, what is observed is a constant lengthening of deadlines for the completion of strategic defense investments, with increased costs and a loss of efficiency for the achievement of the objectives of the National Defense Policy (PND). The article presents some alternatives that could minimize the unpredictability of financial resources for strategic defense projects and that could contribute to the best use of public resources, according to result-oriented budgeting.I would like to express my gratitude to all Ph. D. of class 62 (2022-2023) of the Inter-American Defense College - IACD, especially Dr. Mirlis Reyes, for sharing bibliography related to the topic, that was essential for writing this article.

Optimizing multi-channel procurement planning under disruption risks

Procurement plays a vital role in supply chain management, which directly affects the production, delivery, and reputation of enterprises. This paper investigates the multi-channel procurement planning problem (MCPP-R) considering the impact of disruption risk, uncertain demand and spot-market price. To meet the customer demand, the buyer can make purchases by signing a long-term contract with the primary supplier (PS), which offers certain advantages in price but may be susceptible to disruption risks. Alternatively, the buyer can enter into an option contract to retain the right to purchase from a backup supplier (BS). Additionally, the buyer can also purchase from the spot market with uncertain prices. During the procurement process, the buyer needs to decide the quantity to order from the PS and the quantity to reserve from the BS first, and then decide the quantities to reserve from a BS and the spot market respectively when the customer demand realization and spot-market price emerge. The MCPP-R is to find the optimal procurement portfolio solution with the minimum expected total procurement cost, formulated as a two-stage stochastic programming model. Due to the non-convex and non-continuous nature, the MCPP-R model is solved optimally by transforming equivalently into a shortest-path problem (SPP) with constraints. The solution method does not have specific requirements for the distribution of uncertain demand and spot-market price. We conduct extensive numerical experiments to analyze the impact of risk and uncertainty in demand and spot-market price on the procurement plan. The experimental analysis indicates that BS plays a crucial role in most cases, particularly with high disruption probability or high spot-market price.

Multi-period quality and pricing decision in production-focused and market-focused supply chains: How to manage a long-term contractual relationship

This study investigates the effect of the long-term contract on multi-period decisions regarding product quality and sales price in a production-focused supply chain (PSC) and a market-focused supply chain (MSC). By introducing cumulative quality investment over time as in practice and comparing long-term supply chain performance, we reveal that the relationship between supply chain players is the key factor impacting long-term performance. To enhance the supply chain’s long-term profit performance, we find the contract condition should be more advantageous to the supplier responsible for product quality than to the buyer deciding on the sales price, regardless of supply chain types and environmental changes. We also reveal that the MSC can outperform the PSC in the long run. However, it should be noted that the contract condition needs to be more advantageous to the supplier in the MSC than in the PSC. We provide new and significant guidelines for practicing managers by revealing that long-term decisions should differ from single-period decisions.

Navigating Sustainability and Inclusivity: Women-Led Community-Based Businesses in Post-Disaster Recovery

Community-based businesses have emerged as a means of addressing socio-economic challenges in the aftermath of disasters. This study investigates the contribution of women-led community-based businesses to recovery and their long-term sustainability. It draws upon case studies in the Tohoku region of Japan and Banda Aceh, Indonesia, areas impacted by major earthquakes and tsunamis over a decade ago. Qualitative data were collected through semi-structured interviews. The findings reveal that the community-based businesses surveyed had evolved from mere “reconstruction goods” by maintaining sustained commitment and developing products. Enhancing organizational credibility through quality improvement efforts was crucial for securing long-term contracts with private companies, a key factor for business continuity. However, prioritizing sustainability often came at the cost of diminished community inclusivity, as differences in skill levels and misaligned values among participants led to departures. This study highlights the challenges in balancing business longevity with maintaining businesses’ role as spaces for social interaction and community rebuilding.

Road Traffic Enforcement: Using Technology Through Public-Private Partnerships (PPP)

The past two decades have seen a wide - ranging wave of privatizations in formerly government owned or - controlled activities. A government task or service which is funded and operated through a partnership between a public sector authority and private sector company based on guidelines and performance standards set by a public party is typically referred to as a Public Private Partnership (PPP). In most countries traffic enforcement cameras and other equipment are purchased, owned, and operated by government organisations. Back - offices, where violation data are processed, citations issued, and traffic fines collected, have traditionally been government - run activities. In a PPP model, a private party invests and installs enforcement equipment (e. g. speed or red - light cameras) and conducts back office processing, such as sending out violation notices and managing and confirming fine collection. The investment in equipment and related processing and support activities are funded by fine revenues collected from the motoring public over the contract term. Gaining public support, and ultimately acceptance, for the PPP model is crucial, which is why transparency, publicity and continuous communication are key factors for successful and sustainable implementation. Full service PPPs are often organised on a municipal level in close consultation with the local administration and police. Due to the high initial investment and gradual repayment, such PPPs are typically based on longer term contracts. Moreover, the regulatory environment may require some changes to allow involvement of a private party. One process that is difficult to outsource is the formal confirmation of a violation by a review of the photo or video evidence. Generally, this can only be validly performed by an authorised government official, such as a police officer. Depending on laws and regulations applicable to specific jurisdictions, there could be more issues that may limit the extent of the private party’s involvement in these PPPs. When properly implemented, PPP’s in traffic enforcement can considerably contribute to the reduction of casualties, injuries and crashes, as well as improve traffic flow, and increase quality of life with more safety, lower emissions and less noise pollution. Speed reduction also significantly benefits the safety of vulnerable road users such as pedestrians, and two - wheelers Personal injury and death on roadways also have a significant impact on the economy through medical costs, lost resources and wages and disability pay outs. These costs are significant and are estimated by the WHO to amount to an average of around 3% of a country’s GNP. This figure rises to 5% in some low - and middle - income countries

Towards Sustainable Cloud Computing: Load Balancing with Nature-Inspired Meta-Heuristic Algorithms

Cloud computing is considered suitable for organizations thanks to its flexibility and the provision of digital services via the Internet. The cloud provides nearly limitless computing resources on demand without any upfront costs or long-term contracts, enabling organizations to meet their computing needs more economically. Furthermore, cloud computing provides higher security, scalability, and reliability levels than traditional computing solutions. The efficiency of the platform affects factors such as Quality of Service (QoS), congestion, lifetime, energy consumption, dependability, and scalability. Load balancing refers to managing traffic flow to spread it across several channels. Asymmetric network traffic results in increased traffic processing, more congestion on specific routes, and fewer packets delivered. The paper focuses on analyzing the use of the meta-optimization algorithm based on the principles of natural selection to solve the imbalance of loads in cloud systems. To sum up, it offers a detailed literature review on the essential meta-heuristic algorithms for load balancing in cloud computing. The study also assesses and analyses meta-heuristic algorithm performance in load balancing, as revealed by past studies, experiments, and case studies. Key performance indicators encompass response time, throughput, resource utilization, and scalability, and they are used to assess how these algorithms impact load balance efficiency.

Private Partner Prioritization for Public–Private Partnership Contracts in a Brazilian Water Company Using a Multi-Criteria Decision Aid Method

Public–private partnerships (PPPs) are long-term contracts between government entities and private companies, and are increasingly being adopted in developing countries due to the large need for investments in sectors such as water and sewerage and also in order to benefit from the experience and to have access to the resources and technology of the private sector. Prioritizing the private party of the contract becomes a complex decision due to the characteristics of PPP contracts, and a standard of evaluation has not been adopted yet, the decision usually being made by evaluating the price. Thus, this research aims to propose a set of criteria to be incorporated into the decision problem that involves technical aspects. It then seeks to rank alternatives by using a multi-criteria decision aid method, FITradeoff, which supports the decision-maker (DM) in prioritization and provides transparency and security to the process.

Развитие логистической инфраструктуры хранения и сбыта скоропортящейся сельскохозяйственной продукции

The article presents the results of an analysis of the logistics infrastructure for storing and marketing agricultural perishable products in the regions of Kazakhstan. The results of a comparative and cluster analysis of the infrastructure of storage and marketing facilities for perishable agricultural products in the amount of 1056 units are presented based on the methods of mathematical statistics and clustering using the SPSS program based on the data provided by the akimats of all 20 regions of Kazakhstan. Problems in the functioning of their infrastructure have been identified. During the analysis, 6 clusters were identified according to the selected indicators. Cluster analysis made it possible to systematize and identify the logistics infrastructure for storage and sales that is most typical for each cluster. Based on the identified problems, the need to develop storage facilities that provide a range of logistics and marketing services, closer interaction between manufacturers, storage facilities and retail trade on the basis of long-term contracts was determined. Based on the results of the cluster analysis, recommendations were proposed for the modernization of existing and construction of new storage facilities, depending on the needs of each region. It is recommended to increase climate-controlled capacity, leading to a reduction in losses of perishable agricultural products and an increase in the efficiency of storage facilities through the construction of modular storage facilities.

The emerging international trade in hydrogen: Environmental policies, innovation, and trade dynamics

Hydrogen produced from renewable energy and other carbon-neutral sources has the potential of becoming an important medium for storing and transporting energy, partially taking on the role that fossil fuels play to date. We develop a novel theoretical and empirical model of sequential trade based on long-term contracts with one or more fixed-capacity projects entering each period in a modified Nash-Cournot competition. We simulate the emerging international trade in hydrogen using calibrated demand, supply, transportation, and policy data, exploring a set of scenarios to determine which factors have significant influence—in particular environmental, innovation, and trade policies. Our findings suggest that hydrogen trade exhibits significant price dispersion and two-way trade as vintages of contracts overlap in a market defined by endogenous innovation and policy interventions. Trade costs and the mode of transportation (pipelines or ammonia conversion, possibly others) play a pivotal role and influence the relative share of hydrogen production types (green, blue, or turquoise). Trade policies emerge as a more essential determinant of hydrogen trade than carbon and innovation policies.

КОНЦЕПТУАЛЬНІ ПРОБЛЕМИ ЗМІСТОВНОЇ ІНТЕРПРЕТАЦІЇ ДЕРЖАВНО-ПРИВАТНОГО ПАРТНЕРСТВА

It has been established that there is still no generally accepted and established definition of public-private partnership in both foreign and domestic literature. In some definitions, the conditional uncertainty of the essence of this concept is deliberately embedded. Thus, the European Investment Bank (EIB) defines a public-private partnership as an agreement between an institution representing public authorities and a private partner, intended for the implementation of public infrastructure projects and public services within the framework of a long-term contract. Since this resolution does not record the nature of such agreements, does not indicate the principles of the relationship between the private and public sectors, then the EIB documents focus, first of all, on the fact that the private sector can receive financial benefits in two ways: payments are made by a state body to a private partner based on the diagnosis of the results of service provision (for example, road availability); the private partner is granted the right to receive revenue from the provision of the service (for example, to introduce and collect tolls for the use of roads). The definitions of the World Bank and the Organization for Economic Co-operation and Development (OECD) are similar and emphasize that a public-private partnership is a long-term contract between the public and private sectors in which significant responsibility rests with the private sector in the field of management, as well as the private sector assumes most of the risks in the implementation of this project. The OECD also emphasizes in its definition the fact that the transfer of risk to a private partner largely depends on the effectiveness of such a project, and that the state's goals are aligned with the private sector's profit-maximizing goals. These definitions are quite cumbersome and detailed, but even they have not become universal and able to cover various options and forms of implementation of public-private partnership. The generalization of the existing approaches to the definition of public-private partnership was further developed, with the selection of three main interpretations: broad (implies the inclusion in the content of the concept of public-private partnership, various options for the interaction of the state and the private sector, aimed at solving any tasks in any spheres of social life); narrow interpretation (presupposes that within the framework of a public-private partnership, the state and business are united to implement a specific investment project regarding those objects that belong to the sphere of public interest and control, for example, related to the production and offer of any public good); contractual (related to the dual nature of the concept of public-private partnership, which involves not only its socio-economic essence, but also its legal one. With this interpretation, the public-private partnership is considered as a specific contract, the subject of which is various works on the construction and use of within the framework of this approach, the concept of public-private partnership is filled with various features and essential conditions of this specific contract, and the subject composition of the participants of contractual relations is also determined). Keywords: relations between private and public sectors, public partner, public-private partnership, private partner, project.

Multi-stage incentive contract design of aviation complex product multi-task delivery strategy

The increasing demand for aviation complex products makes complex product manufacturers pay more attention to delivery efficiency, and the efficiency and effect of delivery problems are the key factors that restrict delivery efficiency. A series of delivery strategy combinations of delivery subjects will affect delivery output and delivery efficiency. This study aims to design a long-term effective incentive contract, which stimulates the subjective initiative of the subject and then investigates the effect of the incentive contract on delivery efficiency under different combinations of delivery strategies. We consider the behavioral characteristics of each technical business department to expand the benchmark incentive model, such as the degree of perceived revenue fairness, the variation of the three relationships (neutrality, competition, and cooperation), and the level of technological transformation capability. The multi-stage incentive mechanism which combines explicit incentives and implicit incentives is developed to explore the optimal delivery strategies based on a benchmark model. The results show that incentive contracts can improve delivery efficiency and benefit delivery centers and technical business departments. The delivery decisions of the department are influenced by the closeness of department relationships and the fairness of assignment, and the departments tend to pay more effort in tasks with high relative importance and low effort cost. When the relative importance of tasks is equal to the ratio of marginal cost, a weak incentive zone in the delivery incentive contract exists. The incentive effect of reputation effect is obvious except for the last stage. Based on the designed incentive contracts, the subjective initiative of the participants can be effectively stimulated to empower complex product delivery.

Incorporating Cost Risk in Supplier Selection for Long Term Contracts

Purchasing firms naturally select the supplier with the lowest total cost. Often overlooked is the impact of the duration of long-term contracts (common in the automotive industry). We provide a method to quantify how risk escalates with contract duration. Our method applies to virtually all cost elements. For clarity, we demonstrate it on logistics costs that can change over a long horizon, resulting in a change in the relative attractiveness of candidate suppliers. We simulate a case study to estimate the likelihood that each supplier will provide the lowest cost over the contract duration. Finally, we quantify the risk reduction afforded by dividing a long contract into a sequence of shorter contracts.

A Tailored Derivative Instrument to Mitigate the Price-and-Quantity Risk Faced by Wind Power Companies

The intermittent nature of wind generation combined with the well-known volatility of electricity spot prices expose Wind Power Companies (WPCs) committed to long-term forward contracts to the so-called price-and-quantity risk. Several instruments were designed in the past years to mitigate this risk exposure. However, most of them were mainly constructed to cope with only one of its parts, i.e., price or generation uncertainty. To tackle this issue, in this work, we propose a tailored derivative instrument for WPCs leveraging the principles of options and renewable indexes. The effectiveness and attractiveness of the proposed instrument, referred to as the Wind-Indexed Option (WInd-Op), are evaluated with real data from the Brazilian sector through an equilibrium setup. We show that Solar Power Companies (SPCs) can be relevant candidates to back these derivatives. Additionally, when compared to the traditional put-and-call options as a benchmark, results indicate that the equilibrium obtained with the new derivative exhibits a significantly higher traded volume (2.9 times greater), lower premium prices (54.7% lower), and greater welfare gain (2.7 greater).

Сбыт металлов платиновой группы: планирование и оптимизация

Introduction. The development of methodological issues of optimizing the activities of mining and metallurgical companies and the sale of platinum group metals are highly relevant in the current market conditions due to sanctions restrictions and the severance of international economic ties. Theoretical analysis. The concept of an optimization model is formulated, the main goals for the sales unit of a mining and metallurgical company are determined, a balanced approach to monthly planning is justified, which involves dividing the sales volume into two parts: under long-term contracts and on the spot market, and the stages of constructing an optimization sales model are developed. Empirical analysis. An optimization model is presented for calculating sales volumes of platinum, palladium and rhodium within two months to obtain maximum operating profit. The model is based on regression modeling of prices for platinum group metals, a cost model built on open data from a Russian mining and metallurgical company. Results. Approbation of the methodology made it possible to justify the sales volumes of platinum group metals in two forecast periods depending on the price environment, which provide the opportunity to increase the total profit of the company under given restrictions.

Optimization Decomposition of Monthly Contracts for Integrated Energy Service Provider Considering Spot Market Bidding Equilibria

Under the current power trading model, especially in the context of the large-scale penetration of renewable energy and the rapid integration of renewable energy into the power system, reasonable medium- and long-term decomposition can reduce the fluctuation in the energy price when the integrated energy service provider (IESP) participates in the spot market. It helps to avoid the price risk of the spot market. Additionally, it promotes the optimization of the operation of the regional energy day-ahead scheduling. At the present stage, most of the medium- and long-term contract decomposition methods focus on the decomposition of a single power and take less consideration of the bidding space in the spot market. This limitation makes it challenging to achieve efficient interaction and interconnection among multi-energy resources and smooth integration between the medium- and long-term market and the spot market. To address these issues, this paper proposes an optimal monthly contract decomposition method for IESPs that takes into account the equilibrium of spot bidding. First, the linking process and rolling framework of multi-energy transactions between the medium- and long-term market and the spot market are designed. Second, an optimal decomposition model for monthly contracts is constructed, and a daily decomposition method for monthly medium- and long-term contracts that accounts for the spot bidding equilibrium is proposed. Then, the daily preliminary decomposition result of medium- and long-term multi-energy contracts is used as the boundary condition of the day-ahead scheduling model, and the coupling characteristics of the multi-energy networks of electricity, gas, and heat are taken into account, as well as the operational characteristics. Then, considering the coupling characteristics and operating characteristics of electricity, gas, and heat networks, the optimal scheduling model of a multi-energy network is constructed to minimize the sum of cumulative daily operating costs, and the monthly final contract decomposition value and daily spot bidding space are derived. Finally, examples are calculated to verify the validity of the decomposition model, and the examples show that the proposed method can reduce the variance in spot energy purchase by about 4.64%, and, at the same time, reduce the cost of contract decomposition by about USD 0.33 million.