The Pricing Analysis for Electricity Forward Contracts

The market-directed operation of the electric power industy has brought both the buyer and seller tremendous risk,and this phenomenon gives broad attention to the forward contract and futures contract,which have played an important role to avert the unconstant price risk.Based on the reference paper[1],we put forward range forward contracts of different,which is common in the finance and foreign exchange market,to serve as the contract model in the electric power market.The rational action respectively help us to get the upper and lower limit in the contract price,and some related theory research also shows that the expected profits of this range forward contracts of different are successfully controlled in a limited range.This contract not only reduce the risk of the high spot price faced by the buyers, but also reduce the risk of the low spot price confronted by the seller.It ensures the winning opportunity to both of the two participants and enhances the success rate of the bargain at the same time.Investigating a real market example and related data,finally,we have analyzed some effects to the profits of both buyers and sellers,caused by the fluctuation of spot price,and got several interesting conclusion.