The Linkage Method between the Medium and Long-Term Market and Spot Market of Electricity-Carbon Coordinated Trading Based on Contract Decomposition

The goal of low-carbon development has had a significant impact on the power industry and it needs to be closely linked with the carbon market. This linkage will inevitably promote the deep integration of the electricity market and the carbon market. In this paper, we propose a mechanism based on contract decomposition for connecting the long-term and spot markets of electricity and carbon coordinated trading, taking into consideration the orderly connection of trading time scales. A three-level decomposition mechanism in the medium and long-term market is constructed to quantify the optimization mode of total carbon quota and power generation allocation. Subsequently, an hourly model for electricity-carbon coordinated trading is established to create a linkage mechanism between the spot market and the medium and long-term market. Finally, the results of clearing the deviation between medium and long-term contract quantities and spot prices are settled, providing a collaborative pricing method for contract electricity prices and deviation prices. This paper presents a synergistic coupling market model from the perspectives of electricity and carbon, as well as medium and long-term and spot markets. The case study verifies the effectiveness of the proposed model, promoting the formation of a scientifically reasonable interaction mechanism between medium and long-term trading prices and spot market prices, and enhancing social welfare.