Enhancing the bargaining power of electricity retailers: policy vs. resource aggregation

This study investigates the impact of the new electricity trading policy and resource aggregation on electricity retailers within the context of medium- and long-term electricity trading in China. Utilizing a unique dataset from an electricity transaction center, our research shows that, compared to traditional power grid companies, as new entrants, electricity retailers are at a disadvantage in electricity trading with power plants. They often secure deals at higher bidding prices. Contrary to expectations, aggregating more resources does not enhance the bargaining power of electricity retailers. However, a newly introduced policy designed to ensure competitiveness and transparency, known as the Double Listing and Double Delisting policy, mitigates this disadvantage by significantly reducing the purchase price for electricity retailers. This study provides practical insights into electricity market reform, promoting equality and inclusion environment, and the development of electricity retailers.