Decision-Making for Inter-Provincial Spot Power Purchases of Power Grid Companies under a Two-Tier Electricity Market

CHEN Yuchen, XU Xiaofeng, FAN Xudong, SONG Li, LI Genzhu, WANG Boyu, LIU Dunnan

Electric Power Construction ›› 2025, Vol. 46 ›› Issue (8) : 166-180.

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Electric Power Construction ›› 2025, Vol. 46 ›› Issue (8) : 166-180. DOI: 10.12204/j.issn.1000-7229.2025.08.015
Power Economics

Decision-Making for Inter-Provincial Spot Power Purchases of Power Grid Companies under a Two-Tier Electricity Market

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Abstract

[Objective] With the continuous acceleration of the construction of China’s national unified power market,significant progress has been made in the development of the inter-provincial power spot market. To cope with the competition among multiple power grids in the multi-temporal market and to support the inter-provincial spot power purchases of power grids,a decision framework has first been proposed by analyzing the purchasing mechanisms and path combinations of provincial grids participating in the inter-provincial spot market. [Methods] Under this framework,data related to power purchases were preprocessed,and a bi-level optimization model was constructed for inter-provincial spot power purchases by power grid companies. The upper level addressed power purchase decision-making,while the lower level represented inter-provincial spot market transactions. This model aimed to synergize the power purchase strategies of the two-tier power market with the participation of multiple market players. Then,the bi-level optimization model is transformed into a single-layer model through strong duality theory and the Karush-Kuhn-Tucker(KKT)condition,and is then linearized to solve the power purchase strategies for power grid companies. [Results] Finally,it is verified through case studies that,compared to traditional power purchase schemes,the proposed method helps reduce overall power purchase costs and can address extreme scenarios where sending provinces reduce power exports and power purchase channel capacities by up to 10% while still maintaining stable overall power purchase costs. [Conclusions] The proposed method makes participation in the two-tier power market economically viable for power grid companies. It can cope with extreme fluctuations within a certain range by raising the bidding price,making it applicable to a certain extent.

Key words

inter-provincial spot market / electricity spot market / bi-level optimization model / power purchase strategies

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CHEN Yuchen , XU Xiaofeng , FAN Xudong , et al . Decision-Making for Inter-Provincial Spot Power Purchases of Power Grid Companies under a Two-Tier Electricity Market[J]. Electric Power Construction. 2025, 46(8): 166-180 https://doi.org/10.12204/j.issn.1000-7229.2025.08.015

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Funding

Fundamental Research Funds for the Central Universities(2024MS160)
Science and Technology Project of State Grid Corporation of China(520185230006)
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