A design for regional ancillary services auction markets in China

It is an appropriate way to nurture and develop regional electricity markets for the restructuring of the electricity industry in China. Ancillary services markets, as well as the energy market, are indispensable for a competitive and healthy electricity industry, although they are quite young in China at present. Based on the experience gained through the global deregulation revolution home and abroad, this paper presents a design for ancillary services auction markets in the regional electricity markets of China. The authors analyze the structure of Chinese regional electricity markets, and explain why an integrated pricing method should be adopted with the principles of economics. In addition, the authors make a theoretical study of designing regional ancillary services markets for China. In doing so, the authors apply the rational Buyer´s algorithm to the markets design and also give the reasons for working this way.