Renewable energy is considered not able to participate in peak regulation actively for being regarded as a consumer of peak shaving resources for a long time. Considering current power system

market mechanism and mode of electricity dispatching in China

the definition of peak shaving service is discussed and the benefits and advantages of different peaking shaving resources are analyzed. Five key features of peak shaving service are listed as universality

diversity

economy

sustainability and directivity. On this basis

the possibility and necessity of renewable energy participating in peak shaving trading is provided. In view of the five features

the domestic actual mechanism of peak shaving compensation and trading is reviewed. Considering the transition period before Chinese spot market is established

a new mechanism of peak shaving compensation is proposed

which is based on the proposed ideal peak shaving curve

taking adjustable power of each time interval as the object of transaction to stimulate various resources to provide peak shaving and promote renewable energy consumption

energy conservation and emission reduction. Case analysis shows this trading mechanism is effective and feasible.