Bi-Level Carbon Trading Model on Demand Side for Integrated Electricity-Gas System

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Abstract
With the exploration of deep decarbonization around the world, it has become a broad consensus that the carbon trading mechanism can promote the low-carbon operation of the energy system by exploring the underlying driver of emissions. The end-users, as the motivator of emission in the integrated electricity-gas system (IEGS), have not been developed so far to participate in the carbon market and help emissions abatement. This paper proposes a bi-level carbon trading scheme on demand side considering the energy consumption level of users and low-carbon demand response. In the upper-level market, an optimal step-based carbon prices customization model is built to impose differentiated incentives on users, thereby balancing the emission mitigation and social welfare. In the lower-level market, a carbon trading mechanism based on the competitive auction program is proposed, then an optimal carbon trading strategy is studied to maximize the consumer surplus and further motivate the low-carbon energy consumption. On the source side, a low-carbon dispatching model of IEGS considering the flexible carbon capture power plant and power-to-gas (CCPP-P2G) is established. Moreover, the Benders decomposition algorithm is used to solve the bi-level optimal model. Case studies verify the feasibility of carbon trading on demand side and demonstrate the environmental and economic benefits of the proposed bi-level carbon trading mechanism.
Funding Information
  • National Natural Science Foundation of China (52177073)

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