An electricity and carbon trading mechanism integrated with TSO-DSO-prosumer coordination

Abstract

Due to the proliferation of distributed renewable energy, bidirectional electricity and carbon interaction appears in the coordinated transmission and distribution network and increases complexity in entities' decision-making. To address the issues, this paper develops a hierarchical market framework integrated with electricity and carbon trading. Specifically, an electricity market which combines locational marginal price (LMP) and peer-to-peer (P2P) trading is established considering transmission and distribution coordination. Meanwhile, based on carbon emission flow and P2P trading, a hierarchical coordinated carbon market is also designed to precisely measure and price carbon responsibility and contribution from prosumers. In addition, a hierarchical distributed algorithm is developed to clear the proposed market with privacy protection. Numerical results authenticate the necessity for transmission and distribution coordination, benefits of distribution electricity P2P trading as well as superiority in carbon measurement and pricing method.