Abstract
At present, the power industry in the world-wide is experiencing unprecedented changes. Reform of the electricity market is full of many uncertainties, especially because of a sharp price fluctuations in the market to participate in the main has brought unprecedented financial risks. However, the power industry as the national economy basic industries, the reform involves National economy and the people's livelihood, which can not be wrong. How in a competitive electricity market in the establishment of an effective risk aversion and prevention mechanism, has become market-oriented reform of the power of the urgent need to study and resolve the issue.
With a well-functioning financial market for electricity, the optimum price path will be approached more closely and the fair competition in electricity market can be promoted. Furthermore, financial markets for electricity can provide the market participants with risk-management tools and smooth the volatility of the spot price. But with the developing of the worldwide reform of electricity market, the participants of the market have been encountering unprecedented market risk, especially huge financial risk evoked by the price fluctuations. Meanwhile, the electricity market crisis in California of America let us think about it. Chinese power industry is carrying out the trial of generation unbundling and the competition bidding. With the development of power industry reform, participants of an electricity market are facing the market risk.
Keywords: Electricity market、Financial markets for electricity、Financial risk、Price spiking、 The way of VaR、Electricity future