Influence of renewable promotion policies on power system operation with carbon emission trading

The reduction of greenhouse gases (GHGs) emission has become the greatest environmental concern worldwide. This paper analyses the operation of power system which is the major contributor of carbon emission, considering emission trading scheme (ETS) and renewable promotion policies such as feed-in-tariff and renewable purchase obligation (RPO). Emission allowances are allocated to power producers based on their power outputs. The interaction of carbon market and energy market has been considered to obtain the CO₂ and renewable energy prices. It is observed that these promotion policies encourage power producers to use more of renewable energy sources and reduce the carbon emitted. These also influence the generation and carbon trading schedule of generators and play an important role in maximizing their welfare. The performance of the model has been demonstrated by applying it on a 5 generating units system.