Compensation Mechanism Research Based On Marginal Cost Theory

From the view of optimizing resources allocation, in order to achieve the goal of maximizing social benefits with fair and open price mechanism being oriented, this paper studies cost compensation based on marginal cost pricing of minimum purchase cost model in depth.First, summarizing literatures, in the joint mode, the minimum purchase cost model based on marginal cost pricing can optimize the allocation of resources and give the signal to maximize social benefits, but will result in compensation; in market, generations at least ensure the recovery of costs. So compensation of cost is very necessary. This paper then analyzes mechanism and meaning of cost compensation.Second, this paper establishes the model and algorithm of static compensation, analyzes the mathematical and economic significance of additional cost function, that is adjustment between fixed and variable costs. This model can realize the balance between sellers and buyers automatically, according with open and fair market principles. And the example of 10 units shows the correctness and effectiveness of proposed model and algorithm.Finally, we discuss compensation mechanism and its implementation from dynamic view initially. Considering cost compensation dynamically must relate to dynamic physical characteristics and time coupling constraints. In this paper, dynamic compensation model is put forward. The example simulation shows that the dynamic constraints will increase compensation, and integrated compensation will reduce frequency and amount of compensation at the same time.Cost is a problem must be solved which is dealing with constituting reasonable price, promoting market competition and ensuring long-term stability of power market. This paper provides a theoretical basis for establishing electricity trading mechanism.