Generation Rights Trade Based On Energy Conservation

The generation rights trade offers an effective market mechanism to reduce the consumption of fossil energy and lessen the emission of exhaust gas in the generation side of electrical industry. This paper first summarizes relevant theories and practical experience of generation rights trade, and analyzes its connotation from the viewpoint of mathematics and economics. After that, energy restrictions are introduced into the transaction of generation rights by considering the energy reduction target in the policy of energy conservation and pollution reduction. Furthermore, the maximum energy-saving amount model and the energy-saving-constrained maximum social utility model are built and evaluated by case study. The results indicate that the second model can reduce coal consumption as well as increase social efficiency, and it is simple and practical, which is applicable to the energy-conservation based generation rights trade in the initial phase of electricity market reform in our country. Finally, the market mechanism of the generation rights trade based on energy conservation is designed according to the mandate of current electricity market, the policy environment as well as the characteristics of the power system operation.