Power-Carbon Market Equilibrium Analysis Considering Joint Decision-Making by Generators

There is a complex linkage between the power market and the carbon market, with the power generation sector as the linkage. Carbon quota price will affect the equilibrium result of the power market, and the equilibrium result of the power market will also affect the carbon emission of the power generation industry, which in turn will affect the carbon quota price. This paper combines the “intensity-based” quota allocation of China carbon market, and uses game equilibrium theory to establish a two-layer optimisation model of the optimal bidding price of power producers and the joint clearing of the electricity and carbon markets. The upper layer is the optimal bidding model of power producers participating in both power and carbon markets, and the lower layer is the clearing model of power and carbon markets. Based on the IEEE 30-node system, the applicability of this paper's two-layer optimisation model in the perfectly competitive scenario, mono-oligopoly scenario and multi-oligopoly scenario is verified, and the results of the arithmetic examples are combined to provide suggestions for the policy formulation of the electricity-carbon market.