Review
Key Issues and Technical Applications in the Study of Power
Markets as the System Adapts to the New Power System
in China
Jun Dong
1
, Dongran Liu
1
, Xihao Dou
1
, Bo Li
2
, Shiyao Lv
1
, Yuzheng Jiang
1
and Tongtao Ma
1,
*
Citation: Dong, J.; Liu, D.; Dou, X.;
Li, B.; Lv, S.; Jiang, Y.; Ma, T. Key
Issues and Technical Applications in
the Study of Power Markets as the
System Adapts to the New Power
System in China. Sustainability 2021,
13, 13409. https://doi.org/10.3390/
su132313409
Academic Editor: Attila Bai
Received: 19 October 2021
Accepted: 1 December 2021
Published: 3 December 2021
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4.0/).
1
Beijing Key Laboratory of New Energy and Low-Carbon Development, School of Economics and
Management, North China Electric Power University, Beijing 102206, China; dongjun@ncepu.edu.cn (J.D.);
1182106008@ncepu.edu.cn (D.L.); xijicc@126.com (X.D.); l33189sy@163.com (S.L.);
120202206107@ncepu.edu.cn (Y.J.)
2
The State Key Laboratory of Power Transmission Equipment & System Security and New Technology,
School of Electrical Engineering, Chongqing University, Chongqing 400044, China; boli9301@163.com
* Correspondence: mtt@ncepu.edu.cn
Abstract:
To reach the “30
·
60” decarbonization target (where carbon emissions start declining in
2030 and reach net zero in 2060), China is restructuring its power system to a new energy-based one.
Given this new situation, this paper reviews previous studies on the power market and highlights key
issues for future research as we seek to adapt to the new power system (NPS). Based on a systematic
literature review, papers on the operational efficiency of the power market, participants’ bidding
strategies and market supervision were identified. In a further step, papers with high relevance were
analyzed in more detail. Then, key studies that focused on market trading under China’s new power
system were picked out for further discussion. New studies were searched for that pertained to
new energy mechanisms and bidding, the transition from coal-fired power, flexible resources and
the technical applications of simulations. The quantitative analysis supports the construction of a
basic paradigm for the study of power markets that is suitable for the new power system. Finally,
the theoretical basis and application suggestions for power market simulations are introduced. This
study summarized the existing research on the power market and further explored the key issues
relating to the power market as it adapts to the NPS, hoping to inspire better research into China’s
power sector, and promote safe, low-carbon, and sustainable development in China’s power industry.
Keywords:
new power system (NPS); power market; new energy; flexible resources; experimental
economics; agent-based computational economics
1. Introduction
The reform of a power system is a major measure and an important part of China’s
energy restructuring. Since the second round of the electricity reform that was launched
in 2015, China’s power market has been further liberalized [
1
]. Meanwhile, the Chinese
government has pledged to halt further CO
2
emissions by 2030 and become carbon neutral
by 2060 [
2
]. This requires higher levels of sustainable development in the power system. In
recent years, China has been accelerating the replacement of fossil fuels. The proportion of
new energy in primary energy consumption continues to rise. Renewable energy power
output reached 2.2 trillion kilowatt-hours in 2020, accounting for 29.5% of national electric-
ity consumption. China has fulfilled its commitment that non-fossil energy consumption
must account for at least 15% of the primary energy consumption by 2020 as scheduled [
3
].
In March 2021, China’s Central Financial and Economic Affairs Commission called for
the building of a new power system (NPS) with new energy as the main source. This
government directive is vital to the power industry’s direction of development. Against
this background, it is particularly important to study the new power system and the power
market trading systems that feature a high proportion of renewable energy.
Sustainability 2021, 13, 13409. https://doi.org/10.3390/su132313409 https://www.mdpi.com/journal/sustainability
