Abstract: 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.