A Two-Stage Algorithm of Locational Marginal Price Calculation Subject to Carbon Emission Allowance

Mingxing Wu, Zhilin Lu, Qing Chen, Tao Zhu, En Lu, Wentian Lu and Mingbo Liu
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Mingxing Wu: Guangdong Power Exchange Center Co., Guangzhou 510080, China
Zhilin Lu: School of Electric Power Engineering, South China University of Technology, Guangzhou 510640, China
Qing Chen: Guangdong Power Exchange Center Co., Guangzhou 510080, China
Tao Zhu: Guangdong Power Exchange Center Co., Guangzhou 510080, China
En Lu: Guangdong Power Exchange Center Co., Guangzhou 510080, China
Wentian Lu: School of Electric Power Engineering, South China University of Technology, Guangzhou 510640, China
Mingbo Liu: School of Electric Power Engineering, South China University of Technology, Guangzhou 510640, China

Energies, 2020, vol. 13, issue 10, 1-20

Abstract: To analyze the effect of carbon emission quota allocation on the locational marginal price (LMP) of day-ahead electricity markets, this paper proposes a two-stage algorithm. For the first stage of the algorithm, a multi-objective optimization model is established to simultaneously minimize the total costs and carbon emission costs of power systems. Hence, an evenly distributed Pareto optimal solution can be solved effectively by means of the normalized normal constraint method. For the second stage, a tracing model is built with the goal of minimizing the total costs of power systems and satisfying the constraints generated based on the Pareto optimal solution obtained from the first stage. Furthermore, the influence of carbon emission quota allocation on the LMP of electricity markets is analyzed, and different schemes to allocate carbon emission quotas are evaluated on a real 1560-bus and 52-unit system.

Keywords: carbon emission allowance; day-ahead electricity market; multi-objective optimization; two-stage algorithm (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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