Game-Based Modelling of the Electric-Carbon Market Considering Multiple Strategic Players

With the global warming, the role of carbon market becomes more and more prominent, and the coupling situation between electricity and carbon market is also found by people. Considering the carbon market, the strategies of power generators in the electricity market will also change. This paper firstly develops a bi-level modeling framework for the participation of multiple generation enterprises in the electric-carbon market. Secondly, the upper-level model, that is the optimal decision-making model of power generators, is established and the lower day-ahead market clearing model is constructed. Then, the lower model is converted into the constraints of the upper-level model by using the Karush-Kuhn- Tucker (KKT) condition. Finally, based on the case of the modified IEEE-5 node system, the equilibrium problem of the electric-carbon market is solved, and the decision-making behavior of generation enterprises is analyzed. The results show that the model with the low cost of power purchase in the electric carbon market as the order of clearing increases the profitability of the enterprises, which is more obvious in the high-emission enterprises.