A Study Of The Price Competition Strategy Of Power Plant In The Eastern China Power Market

Along with the Chinese electric power marketability reform advancing and deepening, the power plant is facing the new challenge. The transformation from the planned economy to the market economy caused the management mode of power plant to be adjusted. This paper discusses the price competition strategy of power plant in the eastern china power market, such as bidding strategy, competition behavior strategy between power plants, as well as the external relations strategy with the market supervisor and the state grid.Bidding strategy is an open question. It does not have optimal solution. In view of eastern china power market rule and test result the paper discusses three bidding methods: bidding method based on cost-plus-profit, bidding method based on forecasting the market-clearing-price, bidding method based on internal load optimization. Usually the three methods are synthetically applied in the power plant marketing practice.The electric power market is similar to an oligopoly market. The power plant act strategically, which affects mutually. The paper applies the market-clearing-price mechanism and the Betrand model to analysis the price war in the test of eastern china power market. During the infinitely repeated bidding process, the power plants probably use other behavior strategies such as cooperation and market power. The paper describes the possibility, profit, and instability in the cooperation, and also argues the factor which affects the cooperation of the power plants in the eastern china power market. The paper also demonstrates the procedure of the big oligarch power plant using market power to bid and the factor which affects using market power in the eastern china power market.Finally the paper discusses how to deal with the relationship to the market supervisor and the state grid that influence the price competition of power plants. On the one hand the power plant should observe the market rule, which is formulated by the supervisor. On the other hand the power plant should avoid the benefit loss which excessively supervising and managing creates. According to the eastern china power market rule and test result, the paper puts forward the proposal from the power plant angle.