An electricity-carbon joint market optimization model for coal-fired power system under China's "dual-carbon" target

In the process of low-carbon transformation of power system in China, providing enough flexible service from coal-fired power units (CFPUs) is one of the most crucial answers to reduce or even avoid the operation risk which is caused by large-scale expansion of variable renewable energy (VRE). To spur CFPUs release flexibility, this paper suggests a two-stage optimal model, taking into account various peaking compensation mechanisms (VPCM) in a day-ahead power and carbon emissions trade (CET) joint market. Pre-clearing is the first stage, which maximizes social welfare, and formal clearing is the second stage, which maximizes the profit of the coal-fired power system. In contrast to the existing fixed peaking compensation mechanism (FPCM), the variable and fixed costs associated with providing peaking regulation are calculated by the VPCM. In addition, the work considers the CET market as an external carbon emissions constraint and internal constraint and no constraint are set to study the effectiveness of the current CET market. The result indicates that the VPCM can adapt more successfully to the cost of CFPUs when providing peaking regulation and increase the profit of the coal-fired power system. Then, "VPCM + external carbon constraint" enables larger profits for coal-fired power systems, whereas "FPCM + internal carbon constraint" stimulates VRE integration and reduces carbon emissions. Finally, the current CET market mechanism is insufficient to support coal-fired power plants in reducing carbon emissions as VRE rises.