Credit and risk management of electricity transaction: A real case based on Guangdong electricity market rules

To further deepen the electricity market reforms, it is a need to improve the credit system of market participants, strengthen the construction of credit management. In a centralized electricity market, market participants must pay a certain amount of guarantee money to protect credit and avoid failure to perform the contract due to various reasons. Although most provinces in China have carried out electricity transaction, but existing credit management system is still in the part of credit evaluation, and the trading risk inspection is insufficient. Thus, it is difficult to form an effective incentive and punishment mechanism for dishonesty. Therefore, it is necessary to establish a relatively perfect credit risk management system which is matched with the construction of China's power market. This paper introduces the theory of credit management and risk assessment in the electricity market, and puts forward the calculation methods of credit limit and tradable electricity limit. Based on credit management rules of Guangdong electricity market, this paper calculates the performance risk of a market participant and the corresponding amount of performance guarantees. Based on the theory and case, this paper analyzes the problems that need to be solved in the current credit and risk management, and points out that settlement risk is closely related to the transaction cycle, price fluctuation, invoicing and settlement time of related transactions. The calculation of market risk needs to take into account the situation of all transactions. More flexible ways such as commercial insurance to standardize financial products to provide mortgage credit guarantee have to be explored. At the same time, a more standardized credit rating method combined with the tangible assets of the market participant is to be established, to estimate the unsecured credit more accurately, and to provide a more relaxed and reasonable trading space for the participant with good credit.