STUDY ON COURNOT MODEL BASED MARKET PARTICIPANTS’ STRATEGIES CONSIDERING FORWARD CONTRACTS

The fluctuations of spot price bring high risk to market participants. As a result, the participants need to sign some contracts to buy or sell power in one certain price in order to decrease market risk. Here, a decision-making model of buyers evading the risk is presented when forward contracts market is considered, and the Cournot model is used to simulate the strategies of suppliers in electricity market. A simple example is employed to study the suppliers’ strategies which correspond to the changes of the variance of spot price, when the buyers adopt different equivalent risk evasion index. The results of calculation example is consistent with the expectation that the along with the increase of the equivalent risk evasion index the contract price will be higher and the contracts will increase too. In addition, the more fluctuating of spot price is, the more profit the suppliers will obtain.