Evaluating the Impact of Carbon Taxes on the Optimal Design of Distributed Energy Systems

Abstract

Distributed energy systems can play an essential role in providing energy with substantial environmental and other benefits. This paper presents a multi-objective optimization model for the planning of distributed energy systems, aiming at simultaneous minimization of the total annual cost and greenhouse gas emissions. The impact of carbon tax rates on the optimal configuration and performance of a distributed energy system is evaluated based on the optimization model. A review of international policies on carbon taxes is performed for estimation of future carbon tax rates in China. Results show that the potential carbon tax in the future may not have significant impacts on the optimal configuration of a distributed energy system.