A collaborative generation-side clearing model for generation company in coupled energy, ancillary service and carbon emission trading market in China

Abstract

Under the current technical conditions and power mix in China, flexible modified thermal power units must provide enough flexibility resources for new power system since the potential of flexible resource has not been fully used. In this paper, a bi-level model is proposed to characterize the decision behavior of the generation company in the case of individual rationality and generation-side coordination. The model fully considers the concrete conditions of China and the technical differences between thermal power units in the multi-market (including energy, ancillary services and carbon emission trading market). The bi-level model could be reconstructed into an equivalent MILP model which can be solved directly. The strategic bidding behavior of small capacity units in the energy market show the urgency to enhance the transmission of deep peak regulation price compensation signals. The coupling of multi market is likely to be the most effective policy package to guide large-scale units to play a supporting role and small-scale units to assume the regulating function to play a role in the transition to a low-carbon future. Long-term policy mechanisms should be developed, combining electricity transition with the mechanisms in the carbon emission trading market to achieve the integral maximization of environmental benefit.