Research on Market Clearing Mechanism for Multi-Type Generators Considering Carbon Cost

Abstract

Market clearing price considering carbon cost will be an important market means to promote the development of low-carbon economy. However, different types of fuel generators have different consumption characteristics and carbon emission characteristics. Thermal power units should pay different price in carbon market, so they have various carbon cost rather than the equivalent carbon cost as in the previous research. Firstly, this paper studies the mechanism of carbon emission allowances and the future development of carbon market based on China’s latest carbon market policy. Then the carbon cost is incorporated into the cost model of various thermal power units, and a multi-type energy transaction model considering the carbon cost of diverse generators is established. Locational marginal electricity price (LMEP) and carbon price (LMCP) are obtained. Finally, the simulation was carried out in the modified PJM-5 node power system. It proves that, complex locational marginal price will increase due to the additional carbon cost of thermal power units, and the clearing model in this paper will improve the utilization rate of low carbon emission units. In addition, with the development of low-carbon economy, the LMCP will gradually increase, promoting the development of renewable energy.