Low carbon and efficiency oriented day-ahead joint electrical energy and ancillary services market clearing model for generation-side in China

Liuhan Lan, Xingping Zhang and Youzhong Zhang

Energy Economics, 2023, vol. 121, issue C

Abstract: China's market-oriented reform of electricity transaction and carbon neutrality target will bring new challenges to thermal power generators. Under the joint clearing mechanism of the energy and ancillary services markets, this paper proposed a bi-level model to characterize the individual-oriented behavior of the power generation company and the system-oriented collaborative decision-making behavior of generation companies. The bi-level optimization model is converted to a mathematical program with equilibrium constraints and further transformed into mixed-integer linear programming models which can be solved directly by using linearization techniques. We evaluated the impact of generation companies' behavior decisions in a regional power system under different levels of renewable energy penetration and deep-peaking compensation prices. Compared with the individual-oriented mechanism, a lower emission level, a lower average daily clearing price and higher unit efficiency would be achieved under system-oriented mechanism, even if there will be some loss of profit. The system-oriented decision-making behavior that will bring environmental benefits deserves more attempts. Therefore, for a power generation group with multiple generating units, the adoption of system-oriented decision is more conducive to realize the low-carbon transformation, which is an alternative way to promote the low-carbon transition of the power system in China.

Keywords: Electrical energy market; Ancillary service market; Strategic offering; Bi-level programming (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:121:y:2023:i:c:s0140988323001846

DOI: 10.1016/j.eneco.2023.106686

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