Enable a Carbon Efficient Power Grid via Minimal Uplift Payments

The COVID-19 has slowed down global economic growth. Meanwhile, it also significantly cuts the global carbon emission, which provides a golden opportunity for the whole world to combat the climate change together. While the former policies (e.g., the CAFE standards, renewable portfolio standards, et...

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Bibliographic Details
Published in:IEEE transactions on sustainable energy 2022-07, Vol.13 (3), p.1329-1343
Main Authors: Zhang, Jiasheng, Sun, Jian, Wu, Chenye
Format: Article
Language:English
Subjects:
Algorithms
Carbon
Carbon dioxide
carbon emission reduction
Carbon emissions
Carbon tax
Climate change
COVID-19
Economic development
Economic growth
Electric power grids
Electricity distribution
Electricity supply industry
Emissions control
Emissions trading
Environmental tax
Finance
Fossil fuels
Generators
Numerical analysis
Payments
Renewable energy sources
strategic behavior analysis
Taxation
Theoretical analysis
Uplift
Uplift payment
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Summary:The COVID-19 has slowed down global economic growth. Meanwhile, it also significantly cuts the global carbon emission, which provides a golden opportunity for the whole world to combat the climate change together. While the former policies (e.g., the CAFE standards, renewable portfolio standards, etc.) have reduced certain level of fossil fuel consumption, the most effective measures (such as carbon tax, cap-and-trade programs) are still far from ready for global implementation. This paper investigates an alternative way to achieve a more carbon efficient power grid using the uplift payment scheme. Specifically, we propose an effective algorithm to guarantee carbon efficiency with minimal uplift payments. We also submit that this scheme provides more flexibility to realize carbon reduction than carbon tax, which is exemplified by thorough numerical studies. Furthermore, we show that the stability of the power grid can be ensured under our uplift payment scheme, both from theoretical analysis and numerical studies. The results strengthen our belief that our uplift payment scheme is practicable for carbon reduction in the electricity market.
ISSN:1949-3029
1949-3037
DOI:10.1109/TSTE.2022.3152774