With the steady decline in the electricity market monopoly, the risks of generator in regional monopoly seller market become apparent. This paper designs an electricity forward contract involving power put options based on the option theory. The analytical solution of the optimal quantity of power put options that the large power plant should reserve is calculated by modeling the maximum expectation profit. It is verified that the contracts with the put option has more practicality than general forward contracts for differences from the theoretical studies and numerical analysis, and it also i...
