Research on Lease Operation Model and Mechanism of Pumped-Storage Power Station Based on Incentive Compatibility Principle

In the current power market environment of China, lease operation mode of pumped storage power station is an efficient way to realize static and dynamic benefits of power station, also it's one of main operation mode in China. A two-party profit model among pumped-storage power station and grid companies was build. The profits of power station and grid company were discussed to meet the individual intent of these two-party as well as social welfare when social welfare reach maximum. Based on incentive compatibility principle of mechanism design theory, a new lease operating mode for the pumped-storage power station that the rental fee were dynamic compensate was put forward and was explained with models to verify that it can achieve the two-party win-win and improve social welfare.