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has been cited by the following article:

• TITLE: Power Purchase Model of Provincial Grids Based on Diverse Energy Coordination Hedging Optimization

  AUTHORS: Dunnan Liu, Yujie Xu, Weimin Zeng, Jiangping Liu, Min Fan, Xinming Liu

  KEYWORDS: Power Purchase Optimization; Hedging; Compression and Compensation; Large-Scale System Decomposition-Coordination

  JOURNAL NAME: Journal of Power and Energy Engineering, Vol.2 No.4, April 22, 2014

  ABSTRACT: Under the background of energy conservation, the grid companies should give priority to consumptive hydropower, wind power and other clean electricity to fulfill their social responsibility and promote the carbon emission reduction in power industry. But under the current power purchase mode, grid companies must first perform the contract. This is extremely uneconomical and not environmentally friendly. Based on hedging theory, this paper proposes a power purchase optimization model using the strategy of “compression and compensation”. If outer price is lower than the contract price, the grid can compress contract power appropriately, leaving more space for purchasing electricity; if outer price is not attractive enough, the grid should timely improve contract proportion, compensating the deviations of contract caused by "compression". Based on the strategy of "compression and compensation", it can effectively reduce the abandoned wind and water, enhance the economic and social benefits of provincial power grid.