[2210.09813] Identifying Operation Equilibrium in Integrated Electricity, Natural Gas, and Carbon-Emission Markets
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Electrical Engineering and Systems Science > Systems and Control

arXiv:2210.09813 (eess)
[Submitted on 18 Oct 2022]

Title:Identifying Operation Equilibrium in Integrated Electricity, Natural Gas, and Carbon-Emission Markets

Authors:Yijie Yang, Jian Shi, Dan Wang, Chenye Wu, Zhu Han
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Abstract:The decarbonization of the power sector plays a pivotal role in economy-wide decarbonization to set the world on track to limit warming to 1.5°C by 2050. Carbon emission markets can play a significant role in this transition by putting a price on carbon and giving electricity producers an incentive to reduce their emissions. In this paper, we study the operational equilibrium of an integrated regional/jurisdictional energy system that comprises an electricity market, a natural gas market, and a carbon emission market. We first propose the novel role of a regional carbon market operator (CMO). Different than the conventional cap-and-trade carbon trading mechanism, the proposed CMO manages carbon allowance trading in a centralized jurisdictional carbon emission market. We then develop the formulation to identify the operational equilibrium of the electricity, natural gas, and carbon emission markets based on their interactions. The proposed equilibrium can be obtained by solving the Karush-Kuhn-Tucker (KKT) conditions of all three operational models simultaneously. Simulation results demonstrate that the proposed approach is more flexible, consistent, and effective in mitigating carbon emissions compared with the cap-and-trade mechanism.
Subjects: Systems and Control (eess.SY)
Cite as: arXiv:2210.09813 [eess.SY]
  (or arXiv:2210.09813v1 [eess.SY] for this version)
  https://doi.org/10.48550/arXiv.2210.09813

Submission history

From: Jian Shi [view email]
[v1] Tue, 18 Oct 2022 12:45:46 UTC (1,449 KB)
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