Assessing the policy synergy among power, carbon emissions trading and tradable green certificate market mechanisms on strategic GENCOs in China

Xinyue Zhang, Xiaopeng Guo and Xingping Zhang

Energy, 2023, vol. 278, issue PB

Abstract: The establishment of carbon emissions trading (CET) and tradable green certificate (TGC) markets in China will cause great alterations in the bidding behavior for generation companies (GENCOs) and affect the low-carbon transformation of power industry. In this paper, a Nash bargaining game model is constructed to assess the synergy of power, CET and TGC markets on decision behavior of non-renewable energy GENCOs, renewable energy GENCOs and power purchasers. The simulation results show that there is transition incentive effect, price interaction effect and profit blocking effect between three markets. With the introduction of emissions trading scheme and renewable portfolio standard (RPS), the scheduled power of renewable energy GENCOs will increase by 21.43%, and transaction prices will reduce to 449.58 CNY/MWh; while the scheduled power of non-renewable energy GENCOs will reduce by 4.66%, and transaction prices will increase to 443.71 CNY/MWh, which make all power generation types compete at equivalent price level. Under the current installed capacity distribution and load demand, it is the critical point when RPS is 18.7% and the benchmark value of free carbon quota for units above and below 300 MW are 0.857 tCO2/MWh and 0.959 tCO2/MWh. Once exceeded, it will affect social benefits and emission reduction efficiency.

Keywords: Power market; Carbon emissions trading market; Tradable green certificate market; Strategic bidding behavior; Nash bargaining game (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544223012276
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:278:y:2023:i:pb:s0360544223012276

DOI: 10.1016/j.energy.2023.127833

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().