| As the depletion of fossil energy,environmental pollution and other issues getting worse,renewable energy is drawing more attention and becoming a strong competitor of traditional power sources.However,under the background of unstable supply and high investments,it is hard for renewable plants in China to survived without subsidy.And the experience from mature power market like Nord Pool shows that the establishment and healthy operation of the electricity futures market can promote the development of renewable energy plants with fewer subsidy from government.Though the electricity market in China has gone through several reforms since the last few decades,the market is still not completely liberalized.The wholesale prices are regulated and for renewable it is still based on feed-in tariff;besides there is not yet a competitive spot or derivative market in the generation side.So,this paper introduces electricity futures into the power market of China with the expectation of perfecting the market structure and providing a proper financial tool for renewable plants.To support the establishment of the futures contracts,we first propose two pricing mechanisms for spot market(Demand-side price & Opportunity cost price)and set two scenarios to compare their effects on the futures contract.Base on that,we make an estimation of the risk premium using an econometric model established according to German market and then simulate the futures prices in China’s market.We find that the futures market is backwardation with relatively poor correlation with spot market.Besides,the research of renewable plants’ strategy in futures market shows that under demand-side price,the plants tend to use it as a hedging tool but under opportunity cost price,they are more likely to use it for speculation.And the appropriate usage of the contracts under both scenarios increase the revenues by 6.74% and 12% respectively while the risk is reduced.Finally,some suggestions with regard to the construction of electricity futures market in China and the strategies for renewable plants are given. |
