Abstract: In the context of the low-carbon transformation of the energy system, the operation of electricity markets in various countries faces multiple policy boundaries. To solve the problem of how governments should intervene in markets to achieve multiple objectives, further research on hybrid electricity markets is conducted based on the two-stage market competition theory,combined with the driving relationship between government and market in the electricity market system. First, the equilibrium principles and challenges of traditional electricity markets are deeply analyzed, and the reasons for government intervention in electricity markets are classified and discussed, including externalities, imperfection in the market system, imperfection in market mechanisms, and imperfection in market competition. Then, the significance and challenges of the basic structure of hybrid electricity markets based on the two-stage market competition theory are discussed. On this basis, a two-dimensional four-module hybrid electricity market extension structure is proposed, which includes short-term and long-term, market and government. And the key steps and contents of its design are analyzed. Finally, the design of government intervention methods in hybrid electricity markets is discussed based on the problems existing in China’s electricity market construction.