Design For Incentive Power-Price Mechanism To Coordinate The Electric-Power And Environment Based On Market Transaction

Since the 1990s, many countries have been at a crucial period in power market reform. With the changes of monopoly system of power industry, corresponding changes happened to the way of the electric regulation. In the process of power market reform, the key problem for the electric supervisor is how to design an available power-price mechanism to weaken the market power of power suppliers. As an important foundational industry of the national economy, coal consumption in power industry accounted for 60% of the total. And the pollution, which comes from the power production, accounted for 40% of the total in China. Along with the further increase of the oil crisis, many countries in the world use coal instead of oil to produce electric-power, which is bound to create further deterioration of the environment. As the result, the supervisors have to solve the problem of the emission comes from the electric-power production, when the problem of the monopoly market power had been unsolved. In China, the western energy base gradually formed with implementation of the strategies for west China development, these problems are fiercely conflicting. How to rationally use and distribute energy resources, ensure the coordination in the western energy development, economy development and environmental protection has become the most important issue for the electric supervisor at the government. In order to solve the problem in the Course of electric-power and environment Coordinated Development proposed above, REN Yu-long (2006), domestic expert on electric-power and environment, first proposed a new model of electric regulation: coordinate regulation of electric-power production and Environmental protection. In the new model, corresponding organization structure, mechanism and regime need to be proposed, all these is studying in the project team. As one parts of research result, the paper designs the incentive power-price mechanism for coordinate the electric-power production and environmental protection suitable for new mode of electric regulation.The destination of this study is to design the incentive power-price mechanism of coordinate with the electric-power production and Environmental protection from the theoretical and practical, during the reform in the power market at the new model, namely: discussing how to design the electric-price mechanism under the condition of the emission and market power of the power suppliers supervised. In details, under the coordinate regulation model, how to design incentive electric-power mechanism to reduce pollution emissions in the production of power while meet the enormous demand of electric-power for western economic growth. Finally, an incentive electric-power mechanism based on market transaction that coordinates the power production and environmental protection was constructed to restrain market power of power supplier and stimulate them to reduce emission. From the price mechanism, seek a way to resolve the conflicting problems in the coordinate development of electric-power and environment.The research approach of the paper is: Firstly, the coordination theory and its method were reviewed. On the theory, the basic idea of coordination of electric-power and environment, relevant concepts and methods was proposed. The idea that power-price mechanism which coordinates electric- power and environment based on market transaction is one of important mechanisms is confirmed. After the research status and design theory of the price mechanism were reviewed, some important factors which influence market power behavior of power suppliers were discovered. Through simulated the process which power supplier monopolize market, the factors about natural monopoly and mechanism which influents the market power was analysis, and finding signal transduction is a key factor affect action of power suppler. And then, current power-price mechanism were reviewed again from signal transduction and found that the more interference degree of the signal transduction, the more weaken of the market power of the power suppliers. The interference degree of signal transduction in mechanism belongs to the category of bounded rationality theory. In order to better define the concept of signal transduction mechanism, the paper summarized and analyzed the methods of the bounded rationality modeling method, finding Moore automata is hard to resolve the problem of incomplete information and several participants in game. Therefore, the bounded rationality modeling method based on the Mealy automata was proposed, an economic simulative frame based on Mealy automata was build. In order to dispute conspiracy signal among power suppliers, a quasi-randomized matching power-price mechanism of power suppliers was proposed and simulated in the new frame. The experiment result expressed that the quasi-randomized matching power-price mechanism of power suppliers could reduce the market power of the power supplier and proved it is feasible to design the power-price mechanism from the interference degree of signal transduction. At the same time, for the sake of stimulating power suppliers to reduce emissions and restrain their market power, the concept of electric-production differentiation was introduced; the problem of the single electric-production was solved. According to level of reducing emission, the electric-market was divided into two parts and constructed incentive power-price mechanism to coordinate the electric-power production and environmental protection. And then, the validity of coordinated and incentive power-price mechanism was test through the economic simulation experiment. The simulation results indicate that the method is effective. Finally, it is simulated that a dispute why not takes the comparatively mature emission trade market in to account existing in coordinate incentive mechanism. It is indicated through simulation that compared with power market, emission trade market is too depressed to dispute conspiracy signal among power suppliers.The main features and innovations are as follow:â‘ The research discovers that there are several jumps in the decreasing process of the total quantity of the electric-power along with the decreasing total quantity of the emission. It provides the policy-making references for the government. Ma Zhong(2002)and Ottar Mestad(2007) proposed to use environmental capacity to control the total emission and to carry on the initial allocation emission through the capital market. On the Basis of research above, the incentive coordinately process of the electric-power production and the Environmental protection was considered. total emission was decided by the proportion relation between the unit emission reduce ratio and the unit electric-power product reduce ratio and ,namely, if the unit electric-power product reduce ratio is bigger than the unit emission reduce ratio, then this kind of total quantity control is uneconomical; If increasing the emission, to make the economy increase ratio to be smaller than the ratio which destroys the environment, then this kind of total quantity control thought to be environmental destructiveness. It is difference from other literatures that the mutual influence between electric power trade market and emission trade market was considered. With the emission total quantity decreasing, the total quantity for electric-power production is not monotone decreasing relation in simulation research. In the process of emission total quantity reducing, the total quantity of electric-power product in the power market undergoes several jumps: First, along with the emission reduction, the total quantity of electric-power reduces; after period of time, reduces along with the total of the emission, the total quantity of electric-power increases. And then, the total of the emission reduces again, total quantity of electric-power reduces, and its reduced scope is enlarging unceasingly. The result possesses certain reference meaning to study emission trade theory for researcher and make the policy which control total of the emission for government.â‘¡An extension of the bounded rationality modeling theory based on bounded automata to available to achieve the multi-person bounded rationality gambling behavior modeling was perform. The repeated games model based on bounded automata not only describes the maximization effectiveness of the repeated games, moreover, the decisive cost can be quantitated by the state number of the bounded automata. In recently years, there already have some literature about game theory research in the overseas describing repeated game theory based on bounded automata. So, bounded rationality modeling method based on the Mealy automaton in the paper is a further extension of the bounded rationality modeling method based on the Moore automata which was proposed by Abraham Neyman (2000). The main difference with the Moore automata lies in: The Moore automaton's transition of the state is decided by competitor's behavior in each game; however, the game model based on Mealy automata is decided by utility which he wins in competition each time. Because the utility got by the participator already contains the competitors'behavior and behavior of own, it is not need to specifically consider what decision-making the competitor used, and the number of competitors. Therefore, the game model based on the Mealy automata has the superiority when the information is incomplete and the number of competitors changeable is changeable. Under this theory of modeling instruction, the paper has carried on the modeling to the electric-power produces'behavior. Power supplier's decision-making was described by the bounded automata which can better express the complexity of decision-making. The more complex of decision-making, the more difficult to achieve conspire among electric-power producers. The research result provides the theory basis to design the electric- price mechanism for restraining the market power of power supplier.â‘¢A incentive power-price mechanism of the coordinate with the electric-power production and environmental protection based on the signal transmission was proposed. In current, how to restrain the market power of power suppliers was study in many literatures, but fewer literature concerns on both how to suppressing the market power of electric-power producers and reducing the emission. From the signal transmission, the electric-power mechanisms based on market transaction in current literature were analyzed, and it is found that the market power of power suppliers was restrained with the adding the interference degree of signal transduction. Under these theories, thinking over the environmental factor, a double market model of incentive electric-price mechanism to coordinate electric-power and the environment were proposed. The mechanism interfere the collusive signals of power suppliers from two aspects. On the one hand, quasi-random matching methods make the power suppliers hard to get others'prices and predict the market balanced price, and increase collusive difficulty among power suppliers. On the other hand, the concept of unit emission reduction was introduced in the electric market so that the differentiated of electric-products existed. According to unit emission reduction, the power market was divided into two submarkets. Government could take the different stimulated methods in two submarkets. This way further interference signal transmission among power suppliers so as to restrain market power of power suppliers, while stimulate generators to reduce emissions. Using bounded rationality modeling method based on Mealy automaton in this paper, discovered that the decision model's complexity of the power suppliers was increased. So, it was suggested that the difficult of conspiracy among power suppliers was increased, namely, their market power is restrained. Through the simulation experimental, it is proved that this mechanism is validity to coordinate electric-power produce and environment protection.