Maintenance strategies for a generation company in a CO2 allowance market environment

In a competitive market environment, generation companies (GenCos) can schedule the maintenance periods to maximize their profits. Independent System Operator´s (ISO) functionality is also considered from the view point of system reliability and cost minimization. Carbon Dioxide (CO₂) mitigation policies, such as CO₂ emission cap-and-trade, help to reduce consumption in fossil energy and promote a shift to renewable energy resources. Considering these new effects, GenCos need to adjust their scheduling strategies in the electricity market and bidding strategies in CO₂ allowance market. In this paper, the emission-constrained generation scheduling problem (GSP) involving generation maintenance scheduling and CO₂ emission cap-and-trade is formulated as a Mixed Integer Bi-Level Linear Programming (MIBLP) problem. A novel solution methodology is proposed, and simulation results based on the PJM 5-bus system test case demonstrate that the proposed MIBLP-based model is able to provide valuable information for GenCos´ decision making in both electricity and CO₂ allowance markets.