Initial allocation of carbon emission permits in power systems

Initial allocation modes and schemes are studied in this paper to provide guidelines for allocation of carbon emission permits in power system. We first introduce different allocation modes and the need to apply free allocation to assignability of emission permits. Then, we compare two different allocation schemes, which are based on historical emissions and generation performance standard. Further, a new allocation scheme based on Boltzmann distribution is proposed. Finally, a case study on Shanghai power grid in China is conducted to compare the allocation effects of these schemes respectively. The analytical results show that Boltzmann distribution based scheme has the best performance and should be adopted when developing initial allocation of carbon emission permits in Chinese power systems.