Research on renewable energy consumption and emission reduction in power market based on bi-level decision making in China

Abstract

Because of the commitment of carbon peaking and carbon neutralization, the power market, main based on thermal power, is under the policy's dual action of consumption pressure and CO2 emission reduction pressure. Therefore, renewable portfolio standard and green certificate trading policy are implemented. Based on the comparison of consumption pressure and emission reduction pressure, this study uses game theory to construct a bi-level decision-making model with the government and power plants as the main body, considering the maximization of social welfare, the upper and lower bounds of the green certificate trading market are deduced. The quotation of power plants in different scenarios and the participation of the green certificate trading market and carbon trading market decision making are simulated. The simulation results show: (1) Based on the current situation of power market, there is an optimal renewable portfolio standard to maximize social welfare. (2) The reasonable coexistence of renewable portfolio standard policy and carbon emissions trading policy will help power plants actively participate in the green certificate market and carbon market trading under rational decision-making, optimize the power supply structure, achieve high-quality electricity development, and realize the overall carbon emission reduction target.