Abstract: The locational marginal price mechanism does not guarantee that thermal power plants can recover their startup, shutdown and no-load cost, and in recent years, the large-scale access of renewable power plants has brought more severe challenges to the startup, shutdown and no-load cost’s recovery of thermal power units. For this reason, China’s power market has implemented two recovery mechanisms for thermal power plants’ startup, shutdown and no-load cost, but there have been no scholars who have studied the impact of these recovery mechanisms on the bidding strategies of thermal power plants and the generation adequacy, electricity economy, and market transparency of the power system. Based on the actual operation of China's power market, this paper first introduces and compares two mainstream recovery mechanisms: one that full compensates only startup and shutdown cost, and another that compensates startup, shutdown and no-load cost to non-negative profit, and proposes technical indicators for evaluating these two mechanisms. Secondly, the optimal bidding strategies of thermal power units under these two mechanisms are derived. The calculation results show that compared with the mechanism of full compensating only startup and shutdown cost, the mechanism of compensating startup, shutdown and no-load cost to non-negative profit can reduce the speculative nature of thermal power units’ bids, reduce the total user expenditure, and better protect the safety and economy of power system operation.

Key words: recovery mechanism, startup and shutdown cost, no-load cost, thermal bidding strategy