Value Analysis and Pricing Recommendations for Medium- and Long-Term Contracts in the Electricity Spot Market

[Objective] With the steady advancement of nationwide electricity market reforms, regions like Guangdong and Shanxi have entered the formal operation phase of electricity spot markets. The frequent and unpredictable price fluctuation in the electricity spot market has significantly impacts or the annual revenue of power generation enterprises. This paper aims to deeply analyze the actual value of medium-and long-term contracts, provide scientific and reasonable pricing basis for electricity trading in these contracts, and thus reduce the market risks for power generation enterprises (especially new energy power generation enterprises) signing medium-and long-term contracts, while increasing their power generation income. [Method] This paper selected the Guangdong electricity spot market as a case study, thoroughly analyzing the current stage's congestion cost allocation mechanism and the settlement method of congestion costs in medium-and long-term contracts. Based on historical data, the paper conducted a value evaluation analysis of medium-and long-term contracts implementing separate settlement of medium-and long-term congestion costs. Additionally, for new energy power generation units with base electricity, the paper quantitatively analyzed the actual value of medium-and long-term contracts under current base electricity conditions, providing a basis and suggestions for the pricing of medium-and long-term contracts. [Result] Under the framework of separate settlement of medium-and long-term congestion costs, the value of medium-and long-term contracts for conventional power generation units mainly depends on the day-ahead unified settlement point price. For new energy power generation units, due to the influence of base electricity and other factors, the value of medium-and long-term contracts is also closely related to the node price and the output characteristics of the new energy. [Conclusion] The paper summarizes the value formulas for medium-and long-term contracts applicable to both conventional and new energy power generation units under the separate settlement of medium-and long-term congestion costs, and based on this, proposes pricing suggestions for medium-and long-term contracts. Providing clear valuation and pricing strategies for medium-and long-term contracts for the power generation side, particularly for new energy power generation units, this paper also offers crucial guidance for rule-makers in improving congestion management mechanisms.