Research On The Power Market Trade With Carbon Emission Permits

Climate change is a major global issue of common concerns. To reduce greenhouse gas emissions, many countries have made policies and mechanisms. Carbon emissions trading is one of the widely used market mechanisms. Power sector is the largest source of carbon dioxide emissions, and carbon emissions trading is conducive to promoting power industry emissions of carbon dioxide. Because carbon dioxide emissions and generation conditions are closely associated, carbon emissions trading will affect the power market bidding strategies of generation companies, and their ultimate profits, also affects power market’s trading process and results. Study generators’bidding strategy with carbon emissions trading, as well as the interactions and trading optimization problems of power market and carbon market, has theoretical value and practical significance.This paper explains principle and classification of carbon emissions trading, describes international carbon emissions trading market practice, summarizes process, and trading mode of power industrial carbon emissions trading and its effect. Based on agent of market simulation method, the thesis analyzes generators’bidding game process after implementing carbon emissions trading in power market. Case analysis indicates that, using simulation annealing Q learning algorithm, generators can make decision to get more profit, also, clean energy generators can get more market bid power. This paper analyzes mutual relationship between carbon market and power market, and describes the occurrence conditions of carbon market trading. Based on generators’carbon emissions utility curve, the paper researches carbon market trading optimization problem, and has qualitative analysis of carbon market trading on generators. At last, it has researched balanced trading of carbon market and power market, and used Improved Particle Swarm Optimization to solve. Example analysis shows that, a market has multiple trading balanced points, and the power trading results and social surplus of the balanced points remain various, in market with full competition and reasonable carbon emissions right quota, carbon emissions trading can improve social surplus.