The Necessity Of Development Of China’s Electricity Futures Trading Strategy

The electric power industry is the pillar industry of China’s nationaleconomy, the power supply must meet the economic development of thedemand for electricity, the lack of supply will constrain economicdevelopment, excess supply will reduce production efficiency. Therefore,to improve power efficiency of the transaction will directly reduceproduction costs, improve the electricity supply industry profits.From our current situation, the electricity market to achieve the gradualtransformation of forward transactions has been gradually applied to theactual power trading, however, the existing power trading patterns "ofelectricity supply to the lack of long-term, stable plan","severe tarifffluctuations,"inflexible" method of trading, futures trading and spotmarket lack of connection, electricity consumers is not easy to take theinitiative to participate in market competition and other issues, led to acertain lack of flexibility in the electricity trading on the electricitymarket, electricity market electricity trading products is inadequate, butalso makes the domestic electricity traders face greater risks. However, many foreign countries have successively introduced in the electricitymarket power of electricity futures, options and other derivative products,the innovation and development of new financial instruments, futureshedging, risk aversion function to reduce the enormous price fluctuationsmarket impact. Played a certain role in not only circumvent the country’selectricity trading risk, and also makes its own power resources useefficiency is greatly improved.Order to circumvent the risk of the price of electricity trading in thecountry to carry out the necessity of electricity futures, and learn fromforeign electricity futures trading mode, use the the Granger bootrelations model to study the analysis of futures and spot pricerelationship, the application using the least squares method to estimateFutures the spot hedging than to explore futures trading in hedging ourcurrent characteristics of the power system, analysis of China’s electricityfutures pricing strategy, trading patterns.