Locational electricity–carbon price model: Design and analysis

Abstract

With the increasingly prominent fossil energy crisis and global climate governance problem, carbon abatement has attracted more attention. How to formulate a reasonable carbon-related price incentive signal to guide the low-carbon transformation is still an open question. In this paper, three different calculation models of locational electricity–carbon price are established and analyzed, which include cost-oriented, carbon emission flow-oriented (CEF-oriented) based on optimal power flow (OPF), and CEF-oriented based on carbon-constrained optimal power flow (C-OPF). The carbon-related costs are directly introduced into the objective function in the cost-oriented model based on the locational marginal price (LMP) principle, while they are allocated according to the actual embedded carbon flow and the nodal carbon intensity (NCI) in the CEF-oriented models. In the case study of a 3-bus system, the three models are compared and analyzed from the aspects of the locational electricity–carbon price, dispatching results, total carbon emissions, unit costs, and consumer costs. It is shown that the CEF-oriented model based on C-OPF can not only effectively reduce carbon emissions and obtain fewer unit costs, but also reflect the actual carbon contribution of different regions when there is no power congestion, which is expected to be a more reasonable and viable solution to guide carbon-intensive areas to undertake more carbon abatement obligations compared with the other two models.