Research On The Exit Mechanism Of Electricity Retailers Facing The Electricity Market Environment

In October 2021,the "Notice on Further Deepening the Market-oriented Reform of On-grid Power Prices for Coal-fired Power Generation" was issued,proposing to promote the entry of industrial and commercial users into the electricity retail market,marking the further liberalization of China’s electricity retail market,and the scale of the electricity retail market will be greatly expanded.In this context,it is urgent to establish a comprehensive exit protection mechanism for electricity retailers.The exit mechanism of electricity retailers is an important part of the electricity market mechanism,and the provider of last resort(PoLR)service is an important part of it.Therefore,it is of great significance to deeply study the design connotation of typical national PoLR service mechanism,and design an exit mechanism for electricity retailers that adapts to the development of China’s electricity retail market in combination with the actual situation.The insurance mechanism has the characteristics of dispersing and transferring risks,and has been widely used in the electricity market and electricity trading.It can be also applied to the delisting performance risks of electricity retailers,enriching and improving the supporting mechanism of the electricity retail market.Therefore,this paper studies the application of the exit mechanism of electricity retailers and the insurance mechanism in China’s electricity market in order to further enrich and improve the exit protection mechanism of electricity retailers.First of all,research on the service mechanism of PoLR service mechanism in typical foreign countries.This paper analyzes and compares the design of PoLR service mechanism of three typical electricity markets in the United Kingdom,Australia and Texas of the US,including the design of the start of POLR service,the selection of selection of PoLR provider,the price mechanism,the cost recovery mechanism,and the service period,etc,and extract the experience and enlightenment for China.The mature experience in the design of PoLR service mechanism in typical countries can provide important experience and reference for the design of PoLR service mechanism in China.Then,research is carried out on the exit mechanism of electricity retail companies that adapt to different stages in China.Analyze the practice of China’s PoLR service mechanism,and analyze the characteristics of China’s PoLR service mechanism based on foreign experience.According to the stage division of the electricity retail market and the classification of the exit types of electricity retailers,the exit mechanism of electricity retailers that adapts to the characteristics of the growth and maturity stages of China’s retailers market is designed in stages.In the growth stage of the electricity retail market,an exit mechanism for electricity retailers including competitive POLR services and default POLR services was designed to introduce a competitive mechanism into the guaranteed electricity retail service while ensuring the reliability of user electricity retail services.In the mature stage of the electricity retail market,based on the characteristics of the market,the exit mechanism of electricity retailers is simplified to only include the default POLR service.Finally,the insurance mechanism is introduced into the delisting risk of electricity retailers,and the a model of electricity retailer exit insurance(EREI)based on deposit insurance is studied.In response to the increased cost caused by the transfer of the electricity purchase and retail contracts when the electricity retailers are delisted,an EREI model is established.The model proposes an improved expected loss pricing to calculate the size of the EREI fund,and the model formulates the EREI differential insurance rates according to the credit rating of the electricity retailers.Then,considering the different requirements for the EREI,an optimal compensation model for the EREI is proposed based on the weighted ideal point method.Finally,the case analysis verifies the rationality of the EREI fund size,the insurance premium rate,and the optimal compensation ratio.The EREI is low,which will not significantly increase the premium burden of electricity retailers,but it can effectively disperse and transfer the increase in the cost of electricity retailers delisting.At the same time,considering the optimal compensation ratio makes electricity retailers prudently weigh when delisting self-risk,rational delisting.