Impacts of emission trading schemes on GENCOs’ decision making under multimarket environment

Li, Xr R.; Yu, C.W.; Luo, Fj J.; Ren, Sy Y.; Dong, Zhekang; Wong, K.P.

doi:10.1016/j.epsr.2012.09.012

Cited by 9 publications

(5 citation statements)

References 12 publications

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“…Rong and Lahdelma (2007) proposed a multi-period stochastic optimization model to study a CO 2 emissions trading plan for a combined heat and power producer. Li et al (2013) proposed a dynamic decision-making model to investigate the impacts of CET on the generation of company decisions in a multi-market environment. Li et al (2014) developed an integrated optimization model for planning emissions trading and clean-energy development under uncertainty.…”

Section: Introductionmentioning

confidence: 99%

Carbon emissions trading scheme exploration in China: A multi-agent-based model

Tang

et al. 2015

Energy Policy

201

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Section: Introductionmentioning

confidence: 99%

Carbon emissions trading scheme exploration in China: A multi-agent-based model

Tang

et al. 2015

Energy Policy

201

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“…17 Finally, a few studies have attempted to estimate the impact of ETS on firms in China. Most of the relative studies have mainly focused on the firm's decision making such as production planning, emissions trading and technology adoption under ETS policy by building optimization programming model [18][19][20] or numerical model. [21][22][23] For example, based on an agent-based model, Zhang et al 23 examined the effects of ETS on technology adoption of power plants in China.…”

Section: Literature Reviewmentioning

confidence: 99%

The impacts of emission trading scheme on China’s thermal power industry: A pre-evaluation from the micro level

Zeng

Xie

Zhang

et al. 2019

Energy & Environment

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Emission trading scheme is known as a cost-effective measure for mitigating CO2 emissions, and recently, China has started the world's largest carbon trading system. As the most influential industry in determining China's overall CO2 emission level, the thermal power industry will be greatly affected by nationwide carbon market in the near future. This paper explores the impact of the upcoming national emission trading scheme on China's thermal power industry at firm level. First, based on empirical data of 478 thermal power plants, an empirical analytical framework of micro-firm level is constructed. Then, two kinds of policy scenarios, including no carbon emission trading and national emission trading scheme, in two different market structures have been analyzed. The results show that emission trading scheme have positive impacts on reduction of CO2 emissions among China’s power plants and can reduce the total abatement costs by 0.37%–41.5%. Furthermore, most of the thermal power plants are emissions permits buyers including all the low-emission gas-fired power plants. Additionally, compared with the perfect competition market, more than 70% of thermal power plants increase their total abatement costs in imperfect competition market. These findings provide reference for promoting the development of nationwide carbon emission trading system in China.

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“…price dynamics of one affects the other, because of the direct link between them arising due to overlapping goals [16]. The three markets are considered together for profit maximization but their market price uncertainties have been ignored [17,18]. Though, the correlation of carbon market prices with coal, natural gas and electricity prices has been considered for selection of fuel mix for generation technologies of the power sector [19].…”

Section: Introductionmentioning

confidence: 99%

Carbon price risk influence on GenCo's portfolio optimization

Mathuria

Bhakar

2014

2014 Eighteenth National Power Systems Conference (NPSC)

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Worldwide stress on low carbon economy and reducing aggregate CO 2 emission levels exposed fossil fuel GenCos to carbon risk associated with prices of carbon permits needed to be environmentally compliant. This risk is substantial for fossil fuel GenCos aiming to maximize profit. This paper addresses a power portfolio optimization approach for a fossil fuel GenCo to maximize profit and minimize risk of volatile input costs and output revenue. Carbon price risk along with fuel and electricity price risk with correlation between all revenue and cost side markets has been considered for portfolio selection using Markowitz mean variance theory. A realistic case study on Nordpool market illustrate that carbon price uncertainty considerations alter trading decision of GenCo in electricity market for efficient risk management. Correlated revenue and cost side markets provides better tradeoff in terms of profit and risk for same risk averse level for GenCo. Under strong correlation of electricity and carbon market a higher allocation in spot market provides risk protection. The carbon price risk impact is prominent for high emission GenCos.Index Terms--Electricity price risk; carbon price risk; fuel price risk; mean variance portfolio theory.

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Impacts of emission trading schemes on GENCOs’ decision making under multimarket environment

Cited by 9 publications

References 12 publications

Carbon emissions trading scheme exploration in China: A multi-agent-based model

Carbon emissions trading scheme exploration in China: A multi-agent-based model

The impacts of emission trading scheme on China’s thermal power industry: A pre-evaluation from the micro level

Carbon price risk influence on GenCo's portfolio optimization

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