Abstract: This paper discusses the design principle of electricity wholesale market from the perspective of economics. Electricity is a system integrated real-time product. The security and reliability of power system is the material premise of electricity competition. However, the reconstruction of electricity transaction relationship and the institutional arrangement of competitive electricity transaction are essence of electricity market. The differences of transaction relationship and “right and responsibility equality” between unilateral and bilateral competitive electricity markets lead to significantly different structure of energy market and clearing mechanism of energy spot market. Thus, there are two different modes of electricity transaction: “unilateral transaction”, known as “mandatory electricity pool” and “bilateral transaction”, named as “bilateral transaction + balancing mechanism”. The scientific design of the electricity market should be based on the qualitative identification of transaction relationship and take the “right and responsibility equality” as the main line, and then choose a cost effective mode of electricity transaction according to cost-benefit analysis.

Key words: institutional reform, power market, design principle, power market mode, unilateral transaction, bilateral transaction