A Joint Electricity and Carbon Pricing Method

Abstract

The joint electricity and carbon pricing (JECP) problem is crucial for the low-carbon energy system transition. It is also challenging due to requirements such as providing incentives that can motivate market participants to follow the dispatch schedule and minimizing the impact on affected parties compared to when they were in the traditional electricity market. This letter proposes a novel JECP method based on partial carbon tax and primal-dual optimality conditions. Several nice properties of the proposed method are proven. Tests on different systems show its advantages over the two existing pricing methods.Comment: 4 pages, 3 figure