A Research on Emission Trading Policy in Electric Power Market based on Network Equilibrium Theory

This paper is focused on problems of power network equilibrium model construction and corresponding emission trading policy. Based on super network theory, we establish a supply chain network for power market with three levels of decision makers, which are power plants, power suppliers and demand markets. We establish the finite-dimensional variational inequality formulation, then, derive the competition equilibrium conditions and optimality conditions. We assume that there are several types of power plants, and the initial license are allocated freely to all power plants. We find that the total amount of pollution will not exceed the total amount of emission permits.