Research on model and mechanism of large consumers direct-purchasing based on incentive compatibility principle

Direct-power-purchasing of large consumer is a bilateral agreement model between large consumers and power generation enterprises. Direct-power-purchasing of large consumer pilot is one of the vital practice of China electric power system reform. A three-party profit model among power plants, large consumers and grid companies was build. Based on incentive compatibility principle of mechanism design theory, the prospective expressions of the power consuming increase as well as the three-party win-win achievement were discussed to meet the individual intent of these three-party in large consumers direct-purchasing pilot (each party expect that their profit could increase or keep the original level at least when the purchasing power tariff drop down). The article analyzed the 'utilization hour compensation' policy for the pilot project of direct-power-purchasing of large consumer implemented in Inner Mongolia Municipality. It was indicated that the policy is reasonable. It will motivate the power plants enthusiasm significantly and further reduce the resistance of the pilot reform accordingly.