第23卷第 3期
2008年9月
电 力 科 学 与 技 术 学 报
J0URNAL OF EIECTRIC POW ER SCIENCE AND TECHNOLOGY
V0lJ23 No．3
Sep．2008
电力市场环境下购电协议的形成方法
Chira Aehayuthakan ，Peerapat Vithayasrichareon
(1．泰国国家电力公司 购电协议部，泰国 Bang Kmai Nonthaburi 11130：
2．泰国国家电力公司 系统控制与运行部，泰国 Bang Kmai Nonthaburi ll130)
捅 要 ：专用购电协议(Special PPA)作为一种具有选择性的支付方式，融合了2种不同的电力市场结构，即基于
传统购电协议的垄断市场和基于电力联营体模式的竞争市场．为支付发电公司最初的投资，专用购电协议把电厂
容量的一半作为保证量，按容量费用方式支付；对于没有得到保证的部分容量，按照类似电力联营体的方式参与市
场竞争．专用购电协议提供了不同的优先调度方式 ，可以使得更多的发电机组得到利用；同时对发电公司有所倾
斜，能够激励和吸引发电投资．
关 键 词 ：专门购电协议；常规购电协议；电力联营体；保证的可用量；可用性费用和容量费用
中图分类号：TM 73；F 123．9 文献标识码：A 文章编号：1673-9140(2008)03-0034．13
Development of power purchase agreement in
the electricity market environment
Chira Achayuthakan ，Peerapat Vithayasrichareon
(1．Chira Aehayuthakan Power Purchase Agreement Division，Electricity Generating Authority of Thailand，
BangKruai，Nonthaburi l1 130，Thailand；2．Peerapat Vithayasrichareon System Control and Operation
Division，Electricity Generating Authority of Thailand，Bang Kruai，Nonthaburi 1 1 130，Thailand)
Abstract：The Special Power Purchase Agreement(PPA)iS formulated as an alternative structural pay-
merit to integrate two different electricity market structures which are traditional monopoly market．re
ferred as the Conventional PPA environment and fully competitive market with Power Poo1．referred as
Power Pool environment．The Special PPA Shall partly repay initial investment to the generators with ca—
pacity payment on guaranteed capacity，presumably by half of respective capacity．The non—guaranteed
capaci~ is obliged to market competition in the same manner as that in the Power Poo1．Hence the Spe—
cial PPA both partly guarantees generators investment repayment as well as pursues generators to compete
and absorb market risk．The Special PPA also provides the capacity payment for reserve capacity reflec—
ting the cost of system reliability．The Special PPA provides different merits order dispatching in such a
收稿日期：20o8 8-25
作者简介：Chira Achayuthakan，男 ，泰国亚洲 工学院能源研究专业博士研究生，主要从事能源经济、电力工业改革、热电厂以及可再生能
源电厂研究．
通讯作者：Chira Aehayuthakan，男，博士研究生；E-mail：chira．a@egat．CO．th
第23卷第3期 Chira Achayuthakan，等：电力市场环境下购电协议的形成方法 35
way that m。re generating units are utilized．With the fact that the nature。f ESI is investn1ent intensive,
the Specia1 PPA mechanism ，that payment is distributed more t。generat。rs，w。uld highly enc。urage and
attract participation in generation investment·
Key words：specia1 PPA：c。nventi。na1 PPA；pcwer pool；guaranteed aVailability；AP and capacity p y一
1 Introduction
With the global trend of Electricity Supply Indus—
tnr(ESI)liberalization，which is intended to enhance
efficiency in power acquisition and consumptmn，re
structuring and deregulation of ESI involves a transition
of traditional monopoly power utilities to competitive
market．
Similarly，the Thailand ESI is also undergoing one
of the most significant reforms，moving from the Ino
nopoly environment to a more competitive environment．
The initial stage toward privatization is the introduction
of independent power producer(IPP)scheme in
1994．IPP scheme allowed private investors to partici。
pate in electricity generation business in Thailand
thereby competition in power generation business in’
creased．IPPs are obliged to sale their electricity to on—
ly the Electricity Generating Authority of Thailand
(EGAT)，the single power generation and transmission
utility state enterprise of Thailand，under the Power
Purchase Agreement(PPA)．Another purpose of IPP
scheme is to reduce the financial burden of Thailand
government from investing in electricity generation fa。
cilities．Consequently。EGAT has reduced its role of e—
lectricity producer．
Presently，there are two recognizable Electricity
Supply Industry (ESI) environments that exist
throughout the world．These two ESI environments are
extreme1v different from each other in term of the de—
gree of competitiveness．One environment is the tradi。
tional ESI，a monopoly market in which there is only a
single buyer under the conditions stated in the Power
F’urchase Agreement(PPA)．This market environment
is commonly referred as the Conventional PPA environ—
ment．Another extreme is the fully competitive market
with Power Pool which is refe：rred as Power Pool envi—
ronment． Under the Conventional PPA environment，
generators have a role of Independent Power Producers
(IPPs)，holding long term PPA with power transmis。
sion srate enterprise．The Conventional PPA environ‘
ment Drovides substantial investment incentive， which
attracts investment in generation business．Under the
Conventional PPA environment，generators have mini。
mal market risk as they are guaranteed to fully recover
their initial investment cost through the Availability
Payment(AP)under the PPA as long as they are a—
vailable f-0r dispatch． Under the Power Pool environ—
ment．generators are subjected to full competition in
term of operational pricing which mostly depends on
the plant efficiency． Hence，under the Power Pool，
generafton investment becomes risky and less at~ac-
tive．Contemplating merits order dispatching on both
the Conyrentional PPA and the Power Pool environ—
ments，they usually prevent the uneconomical genera—
tors but already invested to operate．In aspect of merits
order dispatching，there is no significant difference be’
tween the Conventional PPA and the Power Pool envi—
ronm ents．
Even though the principles of a competitive elec。
tricity market sound relatively simple，its implementa—
tion is complex．International experiences have indica—
ted some practical problems that prevented perfect
competition as well as causing severe problems to the
electricity system as a whole．The nature of power mar-
ket is different from other commodities，a fully compet-
itive market with Power Pool in operation is extremely
difficult to establish and may not be appropriate f0r
Thailand．On the other hand。the traditional vertically
integrated enterprise with a single buyer is also unde—
sirable and economically inefficient due to its monopoly
characteristics．However，by integrating these two dis—
tinct aspects of the PPA，which is referred as the Con—
36 电 力 科 学 与 技 术 学 报
2008年9月
ventional PPA，and the Power Pool environments
． a
more optimistic electricity market environment as we11
as being economically efficient can be achieved
． Ham e．
1y the Special PPA structure． This studv intr0duces the
Special PPA structure in a view that it Dr0vides an a1
一
ternative concept in the ESI environment by combining
the advantages and at the same time eliminates the
drawbacks of both the conventional PPA and the Power
Pool structures．
This study is organized in a manner that Section 2
will explanatorily review payment structures for three
ESI environments：the Conventional PPA
． the Power
Pool and the Special PPA
． The demonstrating system
expressed in Section 3 is imitated from Thailand svstem
with minor changes．Section 4 will present the deftnite
patterns of strategic price bidding and merits order dis—
patching f0r each of ESI environments
． The pavment
structures and strategic price bidding are then applied
to demonstrating system．Sections 5 and 6 will provide
the demonstrating results and discussion respectivelv
．
followed with the conclusion in Section 7
。 More0ver．
there are a few aspects on the introduced Special PPA
structure that could be additionally refined as stated in
the further study in Section 8
．
2 Three ESI Environments Payment
Structures
This section will introduce and review the Davment
structures of three different environments based on the
level of competitiveness namely the Conventional PPA
，
the Power Pool，and the introduced Specia1 PPA
．
2．1 The Conventional PPA Power Payment Struc．
ture
The structural payment paid to generators under
the Conventional PPA environment
， typically used in
Thailand[1]，is two parts tariff comprising Availabili—
ty Payment(AP)and Energy Payment(EP)．Equa—
tions(1)to(3)present the payment stmctu re．
Payment=AP +EP (1)
Whereas．
AP=BAC x x Avail (2)
Where，
BAC = Base Availability Credit or rate of AP
(Baht／MWh)
= Weight Multiple reflecting peak and off-peak
period demand．
Avail：Achieved Generation Availability(MW)
In this study， is Figured to 1．6 for peak and
day load periods(8：00—22：00)and 0．5 for off-peak
or light load periods(0：00～8：00，22：00 24：00)
and holiday(0：00～24：00)．And 132 holidays in a
year are assumed．
W hereas：
EP=FuelPrice x PPAHeatRate x
Energy Transferred (3)
Where，
FuelPriee=Market Price of Fuel(Baht／MMBTU)
PPAHeatRate = PPA Contracted Heat Rate
(MMBTU／MWh)
Energy
— Transferred =Actual Generating Energy
(MWh)
It is widely understood that AP is paid as capacity
payment for initial investment repayment and fixed cost
while EP is considered as operation cost
． which consist
of fuel cost and other variable costs． With this payment
structure，AP are guaranteed as long as the power plant
is available for dispatch，generators have no market
risk． Hence，the competition in generation business
occurs only during project bidding phase．Their profit
margin could further increase if they can maintain plant
efficiency above the contracted heat rate stated in the
PPA． The Conventional PPA environment represents
one extreme of monopoly market．
2．2 Power Pool Payment Structure
The structural payment paid to generators under
the Power Pool environment in this study is adopted
from British ESI experience[2]．The Power Poo1 was
discussed close to the theoretical concept of capacity
payment inclusion[3]．The energy price that is paid
to generators is called Pool Purchase Price(PPP)eon—
taining both System Marginal Price(SMP)and capaci．
ty payment．Equations(4)to(5)present the pay—
ment stnlctttlre
第23卷第3期 Chira Achayuthakan，等：电力市场环境下购电协议的形成方法 37
Payment=PPP x Energy
_
Transferred
Whereas，
(4) GuarAvail+FuelPrice×PPAHeatRate ×
PPP=SMP +LOLP x(VOLL—SMP) (5)
Energy
—
Trans~rred =Actual Generating Energy
(MWh)
where，
PPP= Pool Purchase Price，representing ”Pool
price”for the Power Pool environment．
SMP=System Marginal Price．
LOLP=Loss of Lo ad Probability．
VOLL=Value of Lost IJoad．
It is seen that the generators always need to coin-
pete with the power generating competitors．Although
the PPP contains a part of capacity payment to reflect
the cost of system reliability through generation re—
serve，which can induce new generation investment，
the generator can earn revenue to cover their costs only
when being dispatched． The Power Pool environment
represents another extreme of competitive market．
2．3 The Special PPA Payment Structure
This alternative structure is different to and miti—
gating the above two extreme environments：the Con—
ventional PPA and Power Poo1．Under the Special PPA
environment as illustrated in Figure 1，generators shall
be guaranteed their AP at certain capacity，so called
guaranteed availability(GuarAvail)．The remaining
capacity，which is called non—guaranteed availability，
shall be subjected to competition in the same manner
as the Power Poo】environment．
图 1
Figure 1
And the
cordance with
Capacity(MW)
专门购电协议下的发电容量模型
Special PPA generating capacity model
payment structure is established in ae—
Equation(6)：
Payment=higher value of either[SMP x
Energy
_ Transferred]or[BAC x ×
Energy
_ Transomed +(％n×SMP) ×
(Avail．GuarAvail)] (6)
where，
SMP：System Marginal Price，established when
there is dispatch to a non—guaranteed availability，re—
presenting“Pool price” in the Special PPA environ-
m ent．
Energy
—
Transferred = Actual Generating Energy
(MWh)
BAC = Base Availability Credit．or rate of AP
(Baht／MWh)
= W eight Multiple reflecting peak and off-peak
period demand．
Avail=Achieved Generation Availability(MWh)
GuarAvail=Guaranteed Availability in the Special
PPA environment．
FuelPriee=Market Price of Fuel(Baht／MMBTU)
PPAHeatRate=Special PPA Contracted Heat Rate
(MMBTU／MWh)
％ ：Rate of Value of Reserve Capacity．arbi—
trarily set to 10％ in this study．
The interpretation of payment structure can be de—
scribed as that each generator available capacity is bro—
ken into guaranteed availability，with full AP paid，
and non—guaranteed availability，obliged to compete in
the market according to their bidding price． Hence，
the system generating capacity is separated into guaran—
teed capacity，and competitive or non—guaranteed ca—
pacity．
During light load when the system guaranteed ca—
pacity is enough to meet system demand，guaranteed
capacity mostly occupies system demand． Generators
shall be usually paid by nominal PPA payment：guar—
anteed AP and EP，in the same manner as the Conven-
tional PPA stated in Equation(3)．During the period
of high demand，all guaranteed capacity may not be
sufficient to satisfy those demand therefore the Power
Pool segment has to be established to increase the level
of generation capacity．The Pool priee or System Mar—
ginal Price(SMP)is then established．
38 电 力 科 学 与 技 术 学 报 2008年 9月
Higl1 Pool price(or SMP)occurs during high de—
mand period．High demand indicates that the level of
generation reserve capacity is becoming inadequate．
Hence Pool price reflects the worth of reserve capacity
of the system，non—guaranteed capacity is more valua—
ble during high demand．The specified value of non—
guaranteed capacity，％ x SMP，is then established
as additional capacity payment to all generators who
provide non—guaranteed availability，serving system ca—
pacity reserve．Nevertheless．this“％ n ×SMP”shall
be limited to BAC，the normal rate of AP．
The payment formulae shall grant generator to get
paid by the higher value of Pool price，and the nominal
PPA payment plus reserve capacity payment．When the
Pool price is very high and exceeds the nominal PPA
payment，reflecting the substantially high demand，the
generator shall deserve some payment for their plant
operating with higher Pool price．
3 Demonstrating Power System
3．1 Demonstrating System Demand
For simplicity the daily load demand is modeled
as stated below：
Light Load demand of 10，000 MW for 10 hours a
day．
Day Lo ad demand of 13，750 MW for 1 1 hours a
day．
Peak Lo ad demand of 17，000 MW for 3 hours a
day．
Below Figure 2 illustrates daily system demand．
15
-。
5
0：00 2：0o 6：oo 1O：oo 14：oo l8：0o 22：00
Time儿Iour
图2 日负荷需求示意图
Figure 2 Demonstrating daily load demand
3．2 Demonstrating List of Generators and Their
Characteristies
To model the generators sufficiently to run the
model，various aspects，included in the model，are
generator maximum capacity or full availability，mini—
mum generation，fuel type，heat rate characteristics，
the Conventional PPA—based BAC and the Special
PPA-based Guaranteed Availability．
Table 1 presents the demonstrating generators list
resulting in system generation capacity of 22．325 MW ．
Each generator is also modeled to have three operating
ranges，providing piecewise linear cost curve respect—
ing to three operating ranges．
For more simplicity generator cost curve of produ—
cing energy shall be represented by only fuel cost．The
incremental cost shall account only the incremental fuel
cost．
3．3 Other Parameters for the Demons trating Sys-
tern
In this study the market fuels prices are set to：
一 Natural Gas(NG)of 150 Baht／MMBTU
— Lignite of 57．07 Baht／MMBTU
— Coal of 44．44 Baht／MMBTU
The parameter of the VOLL is adopted to be 60．
348 Baht／kWh[4]．And the LOLP is figured to 24
hours a year[5]．
4 Strategic Price Bidding and System
M erits Order Dispatching for Gen-
erators
The price bidding may be composed of the cost of
running a generating unit which includes incremental
cost and fixed cost(i．e．，start—up and no—load costs)．
The allocation of the generator's fixed cost plays a vim—
cial role in the price bidding mechanisms in the elec-
tricity markets with the complex bidding structure[6]．
The price bidding strategy in each of the three en—
vironments is slightly different due to the nature and
payment mechanisms of each environment． However，
the principle of merits order dispatching is similarly ap—
plied to all three environments in which system demand
is exhausted by capacity of the aggregate supply curve
第23卷第3期 Chim Aehayuthakan，等：电力市场环境下购电协议的形成方法 39
in strict merits order(unconstrained dispatch)．It is
assumed that each generator has three operating ranges
providing 3-step piecewise linear cost curve· Various
perceptions are accounted for strategic price bidding in
the Power Pool and the Special PPA environments．The
details of strategic price bidding and principle of merits
order dispatching for each environment are expressed
below．
表1 发电厂各指标明细表
Table 1 Demonstrating generators list
Heat rdte f0mlu1a is：Fuel lnput Rate=d + 6J【)+cP ．Fuel lnput Rate and P afe in‘MMBTU／hr’and ‘Mw 'units respectiVelY
电 力 科 学 与 技 术 学 报 2008年9月
4．1 System Merits Order Dispatching for the
Conventional PPA
In the conventional PPA environment，there is no
Power Pool therefore no energy price bidding exists．
Since each generator has three operating ranges，there
are then three incremental costs for each generator as
shown in Figure 3．
图 3 各发 电机组边 际曲线 图
Figure 3 Incremental cost CHIVe of each generator
According to PPA．generators will be paid on both
fixed costs，including investment repayment，as well as
cost of producing electrical energy ．Since the fixed cost
is fully paid，the aggregate supply curve is then con—
structed based on piecewise incremental cost ranking．
Merits order dispatching is met when the demand is ex—
hausted by capacity of aggregate supply curve．Figure
4 shows the aggregate supply curve，the segments A—
E represent the dispatched segment of the generators，
ranking from lowest to highest incremental costs
E
D
C
图 4 传 统购 电协议环境下的总供给曲线
Figure 4 Aggregate supply cHIve for
the conventional PPA environment
MW
4．2 Strategic Price Bidding and System Merits
Order Dispatching for the Power Pool
This Power Pool payment structure adopted the
auction approach model as the foundation fundamental
of the electricity market．The model of the electricity
market is the key factor in developing the System Mar-
ginal Price(SMP)，which creates Pool price．All the
generators that are dispatched will receive payment at
Pool price．
1) Strategic Price Bidding f0r the Power Poo1．
According to the model that each generator has
three operating ranges，generator shall submit 3 steps
of bidding prices(Baht／MWh)as shown in Figure 5．
For the first operating range，the generators shall set
the bidding price equal to their incremental fuel cost in
attempt to remain connected to the grid and yet concern
to make profit． For the two remaining operating ran—
ges，price bidding shall be set equal to incremental fu—
el cost plus BAC based on the assumption that the gen—
erators seek for inifial investment repayment．
图5 各个发电厂的竞价曲线
Figure 5 Individual bidding curve
of each generator
2)Merits Order Dispatching for the Power Poo1．
The aggregate supply curve is constructed based
on 3一step supply bids individually submitted by the
genc~ators．Merits order dispatching by grid operators
shall select the generators until the demand is exhaus-
ted as shown in Figure 6．Once the total demand is sat—
isfied，the System Marginal Price(SMP)or Pool price
is established，which is the bidding price of the mar—
ginal generator(the most expensive generator that is
dispatched)．
It can be noticed that if each individua1 generator
bids their energy price based on the incremental fuel
cost，the aggregate supply curve shall be identical to
the supply curve of what in the Conventional PPA．
一_ 薹 ∞一蓉u_【暑口 2H
一 暮 lI∞∞一8 Id 一 pl∞
一_ 苫 日∞一 0u IBlu∞gg 口H
第23卷第 3期 chi a Ach yuthakan，等：电力市场环境下购电协议的形成方法 41
SMP
图6 电力联营体模式下与专用购电
协议模 式下的总供 给曲线
Figure 6 Aggregate supply CHIVe for the power
pool and the special PPA environments
MW
4．3 Strategic Bidding and M erits Order Dispatc-
hing for the Special PPA
In the Special PPA environment，山e first operat·
ing range of capacity is guaranteed in its AP．The sec’
0nd and the third operating ranges are obliged for ener-
gY price bidding．The merits order dispatching for the
Special PPA performs in sophisticate steps of determ i—
nation．Both bidding strategy and merits order dispatc。
hing are detailed below．
1)Strategic Bidding for the Special PPA．
The strategic price bids submitted by each genera—
t0r sha11 be for non—guaranteed availability that is set e—
aua1 to incremental fuel cost plus BAC，which is based
on the perception that the generators are to recall their
investment cost repayment． The generator needs no
longer to concern on keeping grid synchronization be—
cause the first operating range，which capacity 1s guar—
anteed．would be dispatched in prior． This strategic
bidding for the second and the third operating ranges is
identical to that is used in the Power Pool environment，
explained in Section 4．2．
2)Merits Order Dispatching for the Special PPA．
The merits order in the Special PPA environment
is mixture of above the Conventional PPA and the Pow—
er Pool environments．The first operating range ot the
Diecewise linear cost curve of each generator，in which
AP is guaranteed，shall be ranked according to their
incre：mental cost．The two remaining operating range of
the Diecewise linear CHIVe shau be ranked according to
their bidding prices plus markup．This markup acts as
a threshold in such a way that if either or both the see。
ond and the third operating ranges are dispatched then
the Pool price exists． This markup payment will be
sDread as reserve capacity payment being made to non
guargnteed capacity of all other generators in the sys。
tern ．
In a cireumstance that none of the second operat
ing range of either generator is dispatched ahead of the
first operating range of either generator-the merits o卜
der among the first operating range shall be based on
the ineremental cost in the same manner as the Con‘
ventional PPA environment．
In some circumstances that the second operating
range 0f one generator is dispatched ahead of the first
piecewise of other generators，then the Pool or compet_
itive market is automatically established．This circum’
stance indicates that it is more economical to pay addi·
tional resenre capacity payment to all generators rather
than to Day the incremental fuel cost of particular gen’
erators．The incremental costs of the uneconomic gen
erators are compared with the bidding price plus mark·
up of the second and the third operating range of other
generators·
Finallv in the circumstance that the first operating
range of all generators are dispatched，the second and
the third operating range of remaining generators are
mnked for merits order dispatching by comparing their
respective sole bidding price in the same manner as the
Power Pool environment．
5 System Demonstration Results
The payment structures representing three market
environments．stated in Section 2，with price bidding
strategies as well as merits order Dispatching as speci·
fied in Section 4 is accounted on demonstrating system ，
which is defined in Section 3．The result of merits or
der dispatching and pricing are shown in Tables 2 and
3．
一毒 鼍 嘎∞一 。 (I警IPP1∞
42 电 力 科 学 与 技 术 学 报 2008年9月
表2 不同电力工业环境下的电力调度
Table 2 Power dispatch in different ESI environments r
第 23卷第3期 Chira Achayuthakan，等：电力市场环境下购电协议的形成方法 43
BLCP—C12 0．872 5
BPK —Cl2
BPK —C34
BPK —Tl2
BPK —T34
BW —
EPEC 1．726 5
CULF—C12
KA—C12
KN—C1
KN —T1
KN 一1’2
LKB—G1
MM —T1O
MM —T11
MM —T1213
MM —T47
MM 一 I'89
NPO—C1
NPO—C2
0．791 2
1．259 2
1．O69 6
1．057 1
0．787
0．894 2
1．0ol 7
1．397 8
2．040 6
1．765 l
2．003 8
1．305 9
1．53l
2．977 7
1．517 6
1．5o0 9
1．225 9
1．328 9
1．432 2
2．197 9
1．9o0 7
RB—Cl3 1．970 9 1．923 4
RB —Tl2
RY —C14
SB—T35
TECO—C1 1．306 8
UN—C12 0．699 2
WN—C13 1．415 2
System Price
Pool Price
Average Price 1．414 4
Daily Average
1．829 3
1．586 9
1．2l8 9
1．689 7
1．397 8
1．951 3
1．763 8
1．765 l
2．003 8
1．305 9
1．53l
1．906 7
1．517 6
1．500 9
1．225 9
1．328 9
1．432 2
2．oo8
1．900 7
1．719 9
2．975 8
1．715 1
4．336 3
1．586 9
1．2l8 9
1．689 7
2．003 1．880 4
1．787 5
1．38l 5
1．381 5
1．38l 5
1．381 5
1．381 5
1．381 5
1．381 5
1．381 5
1．38l 5
1．381 5
1．381 5
1．381 5
1．38l 5
1．381 5
1．381 5
1．381 5
1．38l 5
1．381 5
1．381 5
1．381 5
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．583 8
1．8lO l
1．8lO 1
1．81O 1
0．907 6
1．595
1．501 7
1．2oo 2 1．522 7
1．9l1 2 1．923 3
1．84l 6 1．86l 9
2．793 3 2．829 3
2．9l3 9
1．8l0 l 1．548 8 1．937 9
2．949 9
1．649 3
1．8lO 1 1．920 2 2．3l3 8 1．842 5
1．81O l 0．786 6 1．279 2 1．522 7
1．81O 1
1．8l0 l
1．81O l
1．289 3 1．665 9 1．522 7
3．O9l 4 3．127 5
1．691 5 2．O55
2．551 6
2．812 4
2．522 2
2．080 8
2．563 l
2．824
2．558 2
1．082 5 1．617 3 1．522 7
1．81O 1 1．103 2 1．633 8 1．522 7
1．810 1 0．809 8 1．256 6 1．522 7
1．81O 1
1．81O l
1．810 l
1．810 1
1．8lO 1
1．81O l
1．810 1
1．8lO 1
1．8l0 l
0．899
1．059
1．464 6 1．522 7
1．582 7 1．522 7
1．829 6 2．214 7 2．246 3
1．701 9 2．084 l
1．458 8 1．852 4
1．736 1 2．309 4
2．115 8
1．888 5
2．345 5
1．44_4 8 1．744 7 1．768 3
2．304 2 2．394 4 2．417 5
1．398 6 1．788 6 1．522 7
1．81O l 0．724 8 1．162 4 1．522 7
1．583 8 1．8lO 1 1．477 3 1．868 1 1．577 5
1．583 8 1．8lO 1
1．583 8 1．8lO l
1．555 l
O
1．4l9
1．162 4 1．522 7
1．87l 5 1．853 4
1．7l8 7
电 力 科 学 与 技 术 学 报 2008年9月
6 Discussions on Demonstration
The discussions on demonstration results in vari—
OUS perceptions are stated below．
6．1 Discussion on M erits Order Dispatching Per-
ception
From Table 2，it can be seen that the merits order
dispatching resuhed from the Conventional PPA and
the Power Pool，which have extreme difference in mar一
●
ket principles：monopoly and competitive markets，are
very similar(r=91．31％)．While the Special PPA
gives more diverse result(r=74．44％ to Conventional
PPA and r=82．33％ to Power Poo1)．It clearly im—
plies that the Special PPA environment，as another in—
trodueed market mechanisms，could result in different
merits order dispatching．
Exploring the generation dispatch merits order HH—
der the Conventional PPA environment．some genera-
ring units have to shut down：1 5 units shutdown in
light load periods and 6 units shutdown for the entire
day．In the Power Pool environment，there are genera—
tors that have to shut down：10 units shutdown in light
load period and 6 units shutdown all day． However，
generation merits order under the Special PPA environ—
ment，only 6 units shutdown during light load and no
generating units that have to shutdown all day．Under
the Special PPA structure，all generators are utilized．
The importance of generator synchronization，a—
voiding shutdown and startup，would lead to price dis—
tortion in strategic bidding in such a manner that gener—
ators would bid a very low price in the first operating
range so that they are connected to the system． The
distortion in bidding price would occur particularly dur—
ing light load periods．To let price bidding strategy be
rationally performed，segmenting the generating capaci—
ty into guaranteed capacity，serving light load，and
non-guaranteed capacity for competing like the Special
PPA environment could prevent unnecessary shutdown
and startup thus reducing the financial burden caused
by the plant startup．
6．2 Discussion on System Price Comparison Per-
ception
From Table 3．the Conventional PPA system daily
average price is high because it bears all capacity pay‘
ment of all the generators regardless whether they are
dispatched or not． Generators have no market risk，
they get full capacity payment for investment repayment
even though system demand is low and reserve capacity
increases．The average price for light load period is
lowest because of low value of weight multiple well fig—
ured．The average price for peak load is lower than the
average price of day load because it has the same
weight multiple resulting the same fixed capacity pay—
ment．With the same substantial fixed payment that is
overriding the higher cost of incremental cost， the
higher demand makes average price reduce．
The Power Pool system daily average price is rela—
tively low． Payment is made only to the dispatched
generators．No capacity payment，in a part of system
reliability cost，is made to the non—dispatched genera—
tors．Although the Power Pool can make generators ab—
sorb market risk like those in other businesses，it high—
ly upsets the investment of the non·-dispatched genera·-
tors that were already invested．In adverse it can also
be implied that there is excessive payment to more eco—
nomic generators whose operating cost is cheaper than
others．Hence some generators would achieve substan—
tial profit while others only achieve just enough or may
not have profit at al1．This mechanism is clearly not
equitable to all the market participants．
The British model has introduced additional ca．
pacity payment in Power Pool environment，LOLP x
(VOLL—SMP)，to represent system capacity scarcity
and induce new capacity entry．Anyhow such payment
is made to only the dispatched generators ，generators
that are not dispatched but supplying generation reserve
would suffer from the shortfall in capacity payment．In
reality，generators who supply reserve capacity should
be paid some capacity payment since reserve capacity
can be priced as it increases reliability of the power
第23卷第3期 cni A n t ，等：电力市场环境 竺 兰 ———
system·
It can also be seen that the average electricity
Drice of the Power Pool rises as demand increases and
is exactly equal to Pool prices．This trend appears to
be the same as supply curve since the Power Pool
mechanism is a genuine competitive market·
The svsten daily average price for the Special
PPA is in between prices of the Conventional PPA and
the Power Poo1．The Special PPA environment provides
1ess fixed capacity payment than the Conventional
PPA．During light load period，average price is low
because of low weight multiple in the same manner as
the Conventional PPA． The average prices for peak
load Deriod and day load periods of the Special PPA
seem stabilized．This is because two counter forces are
o fset．The first one is from the Conventional PPA of
the same value of weight multiples to peak and day
load periods，average price shall be lower when de’
mand increases． The second one is from the Power
Pool，inclusion of Pool price． Anyhow the average
pn‘ces for the peak load and day load pcriods actually
depend on level of guaranteed capacity and market
strategic bidding price．
6．3 Discussion on Special PPA Price Structure
Some benefits of the Special PPA structure are
山at：
The Special PPA structure provides a part of ca‘
pacity payment for the guaranteed capacity to all gene卜
ators for a purpose of investment attraction．Generators
will receive some payment to recover their initial in—
vestment．It should be reminded that ESI is an invest·
ment intensive business therefore capacity payment，
which is a mean to recover investment repayment，is
absolutely essential to the investors therefore capacity
payment needs to be properly defined．
The Special PPA environment provides a certain
level of competition．Generators absorb market risk of
getting lower payment when demand is low·In adverse
thev can deserve a higher payment beyond nominal
PPA payment when Pool price exceed s the nominal
PPA rate indicating the capacity scarcity·
The Special PPA environment applies capac ty
payment for reserve capacity to all generators，incl“一
ding non—dispatched generators，on non—guaI．anteed a—
vailabilitv by％ 凡of Pool price to reflect the cost of sys。
tem reliability．This reserve capaclty payment can be
used as a signal for new capacity entry．In this study，
the％ ／z is arbitrarily fixed at 10％ ．
Table 4 shows the resultant rates ot capacity pay—
ment f0r resei've capacity for the Power Pool and the
Special PPA environments．It can be seen that the re—
sultant rates are in a same
stressed again that reserve
magnitude． It should be
capacity payment in the
P0wer Poo1 is paid only to dispatched generators while
resenre capacity payment in the Special PPA environ
ment is Daid to all generators that are available，inclu—
ding山ose that are not dispatched．
表4 示范系统中按备用容量支付的比例
Table 4 Rate of reserve eapacity
payment from demonstrating system
When LOLP is fixed，it is
rate of reserve capacity payment
also evidence that the
in the Power Pool de—
clines when demand is high．Adversely，the Special
PPA provides better reflection on the worth of reserve
eapacity since the rate of reserve capacity payment in
creases as demand rises．
7 Conclusion
Even though two ESI environments of the Conven—
tional PPA and the Power Pool are extremely different
in economical market of monopoly and competitive
markets．thev provide similar merits order dispatching．
The demonstration provides the explanatory results·
The reason behind this similarity is that the criteria of
merit order dispatching in both environments is heavily
relied on the incremental cost．However，the capacity
电 力 科 学 与 技 术 学 报 2008年 9月
payment in these two environments is extremely differ—
ent．The Conventional PPA applies capacity payment
to fully repay investment cost and other fixed cost and
that inhibits each generator to absorb market risks
which caused the competition to decline． The Power
Pool applies capacity payment，which can be consid．
ered as cost of system reliability．The method of capac．
ity payment in the Power Pool seems to hinder the at—
tractiveness of generation investment especially to the
uneconomical generators．
The Special PPA is introduced and demonstrated
throughout this paper． According to the results ob—
tained from the demonstrating system
， the Special PPA
environment seems to be a promising alternative as it
compromises between two extreme environments．It not
only guarantees a part of investment repayment as in—
vestment attraction but also enforces the generators to
absorb market risk．Generator would obtain lower pav。
ment when demand decreases，conversely they would
receive hi．gh payment from Pool price during the high
demand period．
As the transition of ESI toward power liberalization
is imminent，this alternative structure of the Special
PPA would provide satisfactory solution to the existing
PPA holders rather than completely abandon the PPA
when the market becomes competitive．
8 Recommendations for Further Study
Based on
few issues can
8．1 Optimal
Special PPA mechanism，there are a
be further studied：
Setting of Guaranteed Capacity
In this study the guaranteed capacity is arbitrarily
set to about 50％ of total capacity．The appropriate
setting of gu aranteed capacity may be considered in as．
sociate wi山 the demand characteristic． The level of
guaranteed capacity indicates the level of competition
of non。gu aranteed capacity：the lower the guaranteed
capacity，the higher level of competition．
8．2 Proper Rate of
Payment(％n1
Value of Reserve Capacity
The％ n is to determine the value of reserve ca．
pacity in a competitive market． In this study．％ n is
just arbitrarily set to 10％．However the value of％n
could be considered in a more sophisticate manner by
taking LOLP and VOLL etc．into account．
8．3 Optimal Reserve Capacity Taken to Account
The excessive reserve capacity may create finan—
cial burden to the system on reserve capacity cost．
Payment for reserve capacity may be limited by setting
non。dispatch availability payment in proportionate to
ratio of certain defined system reserve capacity and ag-
gregate non—guaranteed capacity．The reserve capacity
payment may further be limited if it is paid to only
spinning reserve availability in proportionate to ratio of
certain defined system spinning reserve capacity and
aggregate available spinning reserve capacity[7]．
References：
[1]EGAT．Request for proposals for power pumhases from independent
power producers for the years 1996-2002[R]．Banskok：Electricity
Generating Authority of Thailand，1994．
[2]John A K Douglas．British electricity privatization．eig}lt years on
[C]．The 12th Conference on the Electric Power Supply Industry，
Pattaya，Thailand，1998．
[3]ChuangA S，Wu F．Capacity paymentsandthepricing ofreliability
in competitive generation markets[C]．The 33rd Hawaii Interuation．
al Conference on System Sciences，Hawaii，USA，2000．
[4]EGAT．Power development plan(PDP)[R]．Bangkok：Electricity
Generating Authority of Thailand，2003．
[5]Energy Research Institute of Chulalongkorn University．Electricity
outage cost study[EB／OL]．http：／／www．eppo．go．th／power／ER1．
study—E／ERI—ExeSummary—E．htm1．
[6]Mendes D P，Kirschen D S．Assessing pool—based pricing mecha-
nisms in competitive electricity markets[C]．IEEE Power Engineer-
ing Society Summer Meeting，Seattle，USA，2000．
[7]EMA．Information paper：amendment to pool rule 14．1“generating
sets’spinning rescue”[R]．Singapore ：Energy Market Authority of
Singapore，2002．
