Study on the connection and settlement of forward electricity market and spot electricity market

Abstract In recent years, China’s electricity market construction has gradually accelerated. Provincial medium and long-term electricity markets (forward market) have been established. Spot electricity markets have been established and have been in the trial operation stage in several pilot provinces in China. This paper introduces the connection and settlement of the forward electricity market and the spot market. The paper mainly discusses the contract for differences mechanism between the forward electricity market and the spot market when the forward bilateral contract are a financial contract. The strategy of forward bilateral contracts is studied according to the price expectations in the spot market.