Conjectural-Variations Equilibria in Electricity, Natural-Gas, and Carbon-Emission Markets

We study the equilibria reached in electricity, natural-gas, and carbon-emission markets, where power producers simultaneously participate in these three markets. We use a conjectural-variations equilibrium model to represent both electricity and natural-gas markets, in which power/natural gas-produ...

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Bibliographic Details
Published in:IEEE transactions on power systems 2021-09, Vol.36 (5), p.4161-4171
Main Authors: Chen, Sheng, Conejo, Antonio J., Wei, Zhinong
Format: Article
Language:English
Subjects:
Carbon
Carbon dioxide
Carbon-emission market
conjectural-variations equilibria
Electricity
electricity market
Electricity supply industry
Emission analysis
Emissions trading
Equilibrium
market power
Markets
Natural gas
natural-gas market
Power demand
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Summary:We study the equilibria reached in electricity, natural-gas, and carbon-emission markets, where power producers simultaneously participate in these three markets. We use a conjectural-variations equilibrium model to represent both electricity and natural-gas markets, in which power/natural gas-producers play a quantity game and adjust their production decisions in reaction to the production levels of their rivals. We use a cap-and-trade mechanism to model the carbon-emission market. We develop a direct approach to identify equilibria involving the three markets, in which the optimality conditions of all players and market clearing conditions are gathered and solved jointly. Numerical results from two test systems illustrate the impact of carbon-emission trading and transmission constraints on the equilibria reached. Additionally, we compare equilibrium results under different types of competition.
ISSN:0885-8950
1558-0679
DOI:10.1109/TPWRS.2021.3066459