Analysis on competitive electricity market with emissions trading market

This study is about power generation operation of fossil fuel generators considering the greenhouse gas emissions trading market. The determination of generating power is related to fuel costs as well as consumption of the emission allowance. Therefore, the optimal generation considers both electricity market and emissions trading market at the same time. Consumption in excess of the allocated emission allowance increases sales in the electricity market, but the cost of purchasing the allowance increases. The opposite occurs when the allowance remains. The relationship between these two markets is modeled in the form of oligopolistic competition to find Nash Equilibrium(NE). The effect of marginal cost and load demand on NE is studied by analyzing the fair price for the emissions trading. Copyright © The Korean Institute of Electrical Engineers