Opinions on unbalanced funds in China’s electricity market

In 2017, the construction of the spot market was started under the new round reform of China’s electricity market. Eight provinces (i.e., Shanxi, Zhejiang, Guangdong, Sichuan, West Inner Mongolia, Shandong, Fujian, and Gansu) were selected by the National Development and Reform Commission (NDRC) as the first batch of spot market trial operation areas (Cai et al., 2020). After that, each province conducted multiple rounds of continuous settlement trial operations. Unbalanced funds are inevitable in the process of the transaction and settlement in the electricity market. Various provinces have also experienced the problem of unbalanced funds during the settlement period. The power grid company does not profit or lose from the market. If the spot market does not apportion the unbalanced funds reasonable, there will produce enormous unbalanced funds in the sustaining operation of the market. When the gap between revenue and expenditure of the power grid company is in the red, the power grid company needs to pay this part of the cost, and then recover the cost from the market entities that generate this part of the unbalanced funds. Therefore, various market entities may obtain extra profits or bear losses from the market in an active or passive situation, which is not in line with the principle of fairness and justice in the market economy and is not conducive to the long-term and healthy development of the spot market. For example, from 16 May 2020 to 19 May 2020 during the trial operation of the spot market in Shandong Province, the unbalanced funds in the third continuous settlement were generated as high as 95.08 million RMB (Fu et al., 2022). This phenomenon has aroused the extensive attention of experts in the industry and has not been effectively solved so far. Therefore, exploring the causes and the solutions of unbalanced funds has an important significance.