A Multi-Objective Unit Commitment Model for Setting Carbon Tax to Reduce CO2 Emission: Thailand's Electricity Generation Case

Carbon tax policy is a cost-effective instrument for emission reduction. However, setting the carbon tax is one of the challenging task for policy makers as it will lead to higher price of emission-intensive sources especially the utility price. In a large-scale power generation system, minimizing the operational cost and the environmental impact are conflicting objectives and it is difficult to find the compromise solution. This paper proposes a methodology of finding a feasible carbon tax rate on strategic level using the operational unit commitment model. We present a multi-objective mixed integer linear programming model to solve the unit commitment problem and consider the environmental impacts. The methodology of analyzing of the effect of carbon tax rates on the power generation, operating cost, and CO2 emission is also provided. The trade-off relationship between total operating cost and total CO2 emission is presented in the Pareto-optimal curve to analyze the feasible carbon tax rate that is influencing on electricity operating cost. The significant outcome of this paper is a modeling framework for the policy makers to determine the possible carbon tax that can be imposed on the electricity generation