In the rapidly evolving landscape of China’s national unified power market, a groundbreaking study published in the journal *Electric Power Construction* (Dianli jianshe) offers a novel approach to inter-provincial spot power purchases, potentially reshaping how power grid companies navigate the complexities of a two-tier electricity market. Led by Yuchen Chen and a team of researchers from North China Electric Power University and the State Grid Corporation of China, the study introduces a decision-making framework designed to optimize power purchase strategies in an increasingly competitive market environment.
As China accelerates the construction of its national unified power market, the inter-provincial power spot market has seen significant development. However, the multi-temporal market and the participation of multiple power grids have introduced new challenges. “The key is to find a way to synergize power purchase strategies across the two-tier power market,” explains Chen, the lead author of the study. “Our research aims to provide a robust decision-making tool that can help power grid companies reduce costs and maintain stability, even in extreme scenarios.”
The research team developed a bi-level optimization model to address these challenges. The upper level focuses on power purchase decision-making, while the lower level represents inter-provincial spot market transactions. By transforming this bi-level model into a single-layer model using strong duality theory and the Karush-Kuhn-Tucker (KKT) condition, the researchers were able to linearize and solve the power purchase strategies for power grid companies effectively.
The practical implications of this research are substantial. Through case studies, the team demonstrated that their method could reduce overall power purchase costs compared to traditional schemes. Moreover, the proposed approach can handle extreme scenarios, such as when sending provinces reduce power exports and power purchase channel capacities by up to 10%, while still maintaining stable overall power purchase costs.
“This method makes participation in the two-tier power market economically viable for power grid companies,” says Chen. “It allows them to cope with extreme fluctuations within a certain range by raising the bidding price, making it applicable to a certain extent.”
The study’s findings have significant commercial impacts for the energy sector. By providing a more efficient and cost-effective approach to inter-provincial spot power purchases, power grid companies can optimize their operations and better serve their customers. The research also highlights the importance of advanced decision-making tools in navigating the complexities of modern electricity markets.
As the energy sector continues to evolve, the insights from this study could shape future developments in power market design and operation. By offering a robust framework for decision-making, the research paves the way for more stable and economically viable participation in the two-tier power market, ultimately benefiting both power grid companies and consumers.
Published in the esteemed journal *Electric Power Construction*, this research underscores the critical role of innovation and advanced modeling in the energy sector. As China continues to build its national unified power market, such studies will be instrumental in ensuring a reliable, efficient, and cost-effective electricity supply for all.