Currently, the construction of China’s electricity spot market has been accelerated, and electricity spot trading will also be carried out nationwide. With the rapid growth of new energy installation scale, its participation in spot electricity trading has become an inevitable trend.
However, due to the increasing penetration rate of new energy and the intermittent and random nature of output, at present, in provinces with new energy participating in the spot market, transaction prices fluctuate more violently, with some regions experiencing zero or even negative electricity prices during certain periods, greatly increasing the uncertainty of future returns.
Participating in spot trading brings great uncertainty to the returns of new energy assets. Operation management has a significant impact on the uncertainty of net cash flow after investment and during the operating period, and plays a decisive role in asset value.
Before participating in market-oriented electricity trading, the electricity price in the new energy generation income is fixed, and asset operation only considers electricity quantity. However, the electricity quantity and electricity price after participating become uncertain factors, and the generation income is jointly affected by the quantity and price.
In this case, the operational approach should shift from energy efficiency to price efficiency. Operation is no longer about formulating and executing operation and maintenance strategies based on the single variable of power generation. It should be deeply bound to transactions, comprehensively considering the transaction risks existing in operation, and developing global transaction and operation strategies, said domestic leading asset operation service provider Concord New Energy at the Shanxi Province High Quality Development Seminar on New Energy held on April 13.
At present, the trading risks during the operation period of new energy mainly reflect in price, contract, deviation assessment, etc. In terms of transaction prices, there is a characteristic of reverse distribution between goods prices and new energy output, that is, when the output is low, the transaction price is high, but when the output is high, the transaction price actually decreases, which may lead to discounted power generation.
Meanwhile, there is a risk of inaccurate contract execution and deviation assessment due to the uncertainty of new energy output. The prediction of new energy output mainly relies on weather forecasting, which could lead to deviation in output forecasting, further leading to inconsistency between transaction results and contract execution. In the spot market, it is necessary to allocate costs for balancing the predicted deviation.
In order to better control risks, market entities should first attach importance to market-oriented electricity trading. Based on an understanding of trading principles, dynamic trading strategies should be developed for different periods of contract electricity to address the risks of market electricity price fluctuations. They should also establish a quantitative trading system, identify risks, coordinate and optimize various medium and long-term contract plans, quantify risks, and execute transactions based on risk preferences.
In addition, the trading strategy should be combined with the operation and maintenance of power plants to seek an operational strategy that maximizes comprehensive income.
When entering the market, many enterprises tend to prioritize spot trading in electricity trading. However, in reality, the profit and loss is much higher than that of spot trading. In addition, in medium to long-term trading, trading patterns on monthly and above time scales are still common. This low-frequency trading makes it difficult for enterprises to quickly adjust to market supply and demand changes, increasing the risk of losses. Enterprises should fully utilize the flexibility of market trading mechanisms for high-frequency trading and decision-making, and improve risk management.
