Maintenance strategies for a generation company in a CO2 allowance market environment

In a competitive market environment, generation companies (GenCos) can schedule the maintenance periods to maximize their profits. Independent System Operator's (ISO) functionality is also considered from the view point of system reliability and cost minimization. Carbon Dioxide (CO
₂
) mitigation policies, such as CO
₂
emission cap-and-trade, help to reduce consumption in fossil energy and promote a shift to renewable energy resources. Considering these new effects, GenCos need to adjust their scheduling strategies in the electricity market and bidding strategies in CO
₂
allowance market. In this paper, the emission-constrained generation scheduling problem (GSP) involving generation maintenance scheduling and CO
₂
emission cap-and-trade is formulated as a Mixed Integer Bi-Level Linear Programming (MIBLP) problem. A novel solution methodology is proposed, and simulation results based on the PJM 5-bus system test case demonstrate that the proposed MIBLP-based model is able to provide valuable information for GenCos' decision making in both electricity and CO
₂
allowance markets.