This paper gives an operation mechanism suitable for Chinese situation at present, including contract standard, the process of rendering data, group bidding, demand forecasting and distribution, approval of bidding data, bidding rules, the fulfillment of the contract, trading mode, clearing price and settlement, change of contract, breach of contract and its disposal.

Based upon the practical conditions of Chinese power systems, the concept of group bidding along with corresponding trading mechanism is proposed in this paper which ensures the equality of all power companies to a great extent.

Electricity market clearing algorithm considering congestion elimination based on block bidding model;

A block bidding algorithm based on actual bids of the generation companies is proposed in this paper in view of the principles of block bidding theory.

A specific clearing price calculation algorithm of electricity markets is presented in this paper according to the principles of block bidding theory.

Based on these rules, load demand is divided into several blocks with continuous segments and the auction is performed for each block, power suppliers can directly determine unit operation and make bidding decisions, which avoids the difficulty of bidding and unit operation in hourly bidding market.

First of all in this paper, the disadvantage of hourly bidding model is analyzed to illustrate the advantag.