Market mechanism of water resources allocation and its efficiency
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Abstract:
The mathematical models for centralized mechanism and market mechanism of water resources allocation are established respectively.The problems existing in centralized mechanism are analyzed in term of the ideas of information economics.The efficiency of the market mechanism is revealed by an equilibrium price system.The efficiency implies that in the equilibrium price system the market mechanism can realize the maximum whole benefit of the centralized mechanism.Meanwhile,the problems in market mechanism of water resources allocation are also pointed out.Keywords:
Market mechanism
Price mechanism
Optimal allocation
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Here,The centralized optimization is researched in depth and it is pointed out that due to the network interaction,reliability constraint,transaction cost constraint and the natural monopoly of power networks,the action of centralized optimization should be emphasized,and the centralization extent in electricity market is far more than that in common commodity market.Meanwhile,two problems that should be solved in the centralized optimization of electricity market,i.e.,the control of optimization range and the selection of optimization method,are researched too.It is pointed out that the substitution of decentralized decision-making by centralized optimization should be avoided.Finally,it is analyzed in detail that for different contents of electricity market the extents of centralized optimization is also different,somewhat needs centralized coordination only;somewhat needs long-term regulation;and somewhat needs centralized decision-making by central organs instead of market participants.
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With the increased level of distributed generation and demand response comes the need for associated mechanisms that can perform well in the face of increasingly complex deregulated energy market structures. Using Lagrangian duality theory, we develop a decentralized market mechanism that ensures that, under the guidance of a market operator, self-interested market participants: generation companies (GenCos), distribution companies (DistCos), and transmission companies (TransCos), reach a competitive equilibrium. We show that even in the presence of informational asymmetries and nonlinearities (such as power losses and transmission constraints), the resulting competitive equilibrium is Pareto efficient.
Competitive equilibrium
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Duality (order theory)
Perfect competition
Market mechanism
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Through over-viewing the research literatures in energy resources pricing mechanism in China and abroad, the overall characteristics existing in the energy resources pricing mechanism research can be summarized.(1)The pricing theory is a single pricing theory with the main content theory of value;(2)The pricing method is deduced by the concept or definition basically, so it is difficult to use them in quantitative calculation for practical problems;(3)Although some pricing mechanism reflect the features of energy resources fully, there is not a pricing mechanism which can reflect and depict the characteristics of energy resources enough;(4) In the research literatures, mostly there is the market pricing mechanism, but the cost of environment research has become the focus in energy resources pricing. Therefore, to reflect the scarcity, supply and demand, and environment cost in energy fully, the author puts forward to an energy resources pricing mechanism which is based on the comprehensive pricing theory, and as ecological environment is the constraint conditions.
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In the market-oriented grid system, the price management of grid resources is a challenging undertaking as most resources are interdependent. So we discuss the dependent relations among grid resources, and build a "price influence model" which reflects the price dependence of resources. Furthermore, a price-adjusting strategy based on the "price influence model" is proposed. The strategy focuses on adjusting the unreasonable prices of partial resources, so as to achieve equilibrium prices of all resources. Finally, we illustrate the utility of our work by one example
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Energy resources optimal allocation of wide area market mechanism in our country is still not perfect at present, part of management policy restricts the marketization organizing and conducting about trans-regional and trans-provincial of electricity trade, which was unable to adapt to the wide area optimal allocation requirement of the resources.In this paper, a target function of the optimal social utility, the largest trading volume was constructed.Also, the power grid safety, continuous and reliable power supply and power supply quality were taken as the constraints of the optimal allocation model of wide area multiple energy.Moreover, the solution algorithm based on the relevant provisions of the trans-regional and trans-provincial concentration matchmaking transaction was established.Finally, according to typical problems existing in the optimal allocation of wide area multiple energy, constructed the market mechanism which can improved the wide area optimal allocation effectively.The model and the market mechanism laid a foundation for breaking the bound of the existing mechanism and the barriers that hindering the power transaction development.Also, it was the basis of promoting the optimization and adjustment of the management policy.
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This paper proposes a two-stage auction-based local market mechanism to allocate physical storage rights (PSRs). As a market product, PSRs are provided by a storage owner and enable the local market participants (including renewable producers, consumers and prosumers) to access the storage. That is, they can book storage in the form of PSRs and dispatch it at a given time aiming to maximize their utility function. The business options we examine to evaluate the position of storage in the market range from storage owner entirely participating in day-ahead (DA) and real-time (RT) markets as an inter-temporal arbitrager, to exclusively acting as a PSR provider in DA only - this way, the storage owner is fully paid upfront in DA. Considering the context above, we propose an equilibrium model where each player optimizes its operational objective. We prove that the equilibrium model can be substituted with an equivalent optimization formulation which clears the proposed market ensuring the same desirable market properties, such as efficiency and revenue adequacy. Results suggest that the certain revenues earned by the storage owner in DA when acting as a PSR provider is equal to its expected profit as a regular market participant, mitigating however its payoff uncertainty and resulting in the same economic return.
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There are two difficult problems should be solved during designing practicable regional transaction model, one of them is to design a rational transaction mechanism to ensure the electricity prices of different provinces in the region are relatively stable, so the balanced economic development of these provinces can be coordinated to implement the harmonious development in both power industry reform and social market economy; and the another one is that some practical problems, such as the power transmission cost for cross-provincial transaction should be impartially and properly solved. On the basis of detailed research on above-mentioned problems, this paper presents a new matchmaking tradeoff competition mechanism design in electricity market which used to be in security and stock market. Based on theoretical analysis, trade procedure and example in South China Power Market are also introduced, which can supply a theoretical reference for the competition mechanism design in regional electricity market.
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