2004 TEEE Intemational Conference on Electric Utlty Deregulation, Resirecturng and Power Technologies (ORPT20M4) Apt 2004 Hong Kong. Study on Risk Evasion in Electricity Market Lin Hai-feng, Zhou Hao Abstract—The operation of electricity market brings a ‘new chance to the insurance companies to expand their busines. The fast Muctuation af letreiy price different ‘rom relative stable ones in other markets ithe main featre ‘of electricity market, it makes the market participants being faken the risks of losing profits. To obtain steady revenue It 1s necessary ta establish an effective mechanism to aveld the risk. According (othe peculiarity of the risk of decreasig fhe revenue of the generating companies, the necessity of led the income fase to avai the risks are researched. Through the explanation of the principle of applying revenue insurance te electricity ‘market and the caleuation results for practical data from 3 Certain provincial electricity market, it is realizable (0 decrease the operating risks of pomer generating enterprises by purchasing the income Inurance, and this method posseses good prospects ‘Index Terms —Elecricty market, Price risk, Rev Insurance. 1 Berooucro TP igo ot tcc pie makes he lestiiy ‘market participants face more risk of profit lose!" ft will do harm 1 the investors’ enthusiasm of investment if the generators can't gain adequate and stable rate of retum on investment, Consequently, its xe Usually, premium i constituted by pure premium and additional’ premium! Since unbom actual Joss may cexceed the ancipant compensation cost, the estimated ‘alse of anticipant compensation cost sith history data tay less than ine value, Furhemore, additonal premium inches the insurer's operating expenses, Commission, taxation and additions profit. Considering the insurer” has mature experiences in calculating additional premium, we don't give unnecesary details here, We ean determine the premium according t theory of linearity affixation"” as follows: P= PararB © 2,42,4048, 5 BAB ABAB+B, « a Fl ag ) Where 2 2-B,+ f expresses the whole additionel premium, that is to say, i is accumulated by operating expentes named 497