Study On Bidding Mechanism Of Electricity Market In Generation Side Considering Environment Cost

During the electricity market reform process, bidding mechanism design is an important issue to be resolved urgently. It is core content of electricity market reform, which not only relates to various markets member's interest, but also affects electricity price of demand-side, and finally affects the disposition efficiency of the social resources. So it is pivotal to the healthy development of electricity industry.The traditional market cleaning price bidding mechanism and pay-as-bid bidding mechanism present serious phenomenon of making false report of high price because of information asymmetry in the implementation process. So it affects the stability of the electrical power system. Therefore, in order to resolve this problem, this paper designed a new incentive bidding mechanism with the theories of incentive regulation, mechanism designing, bidding etc. In this mechanism, generation company obtains the payments which includes two parts, the cost compensating item and the information compensating item. So this mechanism model can guide them to disclose own real cost information and quoting price according to their real marginal costs by shelling out information rent to generation company, so as to achieve electric power system optimization dispatch. In addition, in the case of the thermal power plants'serious environmental pollution problem, this paper combines the environment cost and the generation company's real quoted price, so it causes high polluted generation companies to be at the disadvantageous position when bidding. Thus it encourages generation companies to reduce pollutants dumping, which contributes to achieve the goal of electrical power and the environment coordinated development and promote healthy development of electric power industry. This mechanism includes participation constraint and incentive compatibility constraint, so it is mechanism which is feasible and enforceable.The analysis of incentive bidding mechanism and the example simulation revealed, under this bidding mechanism, generation companies obtain the largest profit when presents its real marginal cost. In other word, presenting its real cost is its most superior strategy. Therefore, generation companies will quote price according to their own real marginal costs. So it can not only drive electricity generation business to disclose their own real information, but realize economical dispatch of electric power resources, and reduces the possibility of driving up the electricity price of generation companies.