Production decision analysis of China's fossil fuel power enterprises in dual market conditions

Ming Meng, Tingting Pang, Xinxin Li and Yi Niu

Energy, 2024, vol. 292, issue C

Abstract: At present, China and some other countries and regions are adopting both electricity and carbon trading markets to optimize the resource allocation of the power industry. The aim of this research is to explain the production behaviors of fossil fuel power enterprises in these complex dual market conditions and then evaluate the market effects. On the basis of the real market rules of China and the production characteristics of these enterprises, we describe the production decision process of enterprises with different market positions (leader, follower, and taker), obtain their optimal yield, and then offer market equilibrium results (total electricity supply, clearing price, total CO2 emissions, and carbon intensity level). Besides, we evaluate the impacts of government interventions (market condition changes) on regional market equilibrium situations by numerical simulation. Our results indicate that the direction (positive or negative) of the above impacts is determined by the level of the allocation coefficients of the carbon emission quota, and the degree of these impacts is determined by the level of fine for unit excess carbon emissions. Moreover, our research also proves that enterprise collusion behaviors aggravate market failure but lower the carbon intensity level.

Keywords: Decision analysis; Dual markets; Power generation enterprise; Stackelberg model; Market equilibrium (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544224002573
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:292:y:2024:i:c:s0360544224002573

DOI: 10.1016/j.energy.2024.130486

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 ().