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In European day-ahead electricity markets, carbon allowance costs passed through by marginal fossil plants raise consumer expenditure and generate inframarginal rents for non-emitting generators. We propose a settlement modification: when…
The participation of renewable, energy storage, and resources with limited fuel inventory in electricity markets has created the need for optimal scheduling and pricing across multiple market intervals for resources with intertemporal…
Decarbonizing the energy supply is essential and urgent to mitigate the increasingly visible climate change. Its basis is identifying emission responsibility during power allocation by the carbon emission flow (CEF) model. However, the main…
Secondary markets and resale are integral components of all emission trading systems. Despite the justification for these secondary trades, such as unpredictable demand, they may encourage speculation and result in the misallocation of…
The ability of deeply decarbonised power systems to ensure adequacy may increasingly depend on long-duration energy storage (LDES). A central challenge is whether capacity markets (CMs), originally designed around thermal generation, can…
As carbon pricing mechanisms like the EU Emissions Trading System are set to increase prices of energy consumption, software architects face growing pressure to design applications that operate within financially predictable emission…
A two-stage multi-period mixed-integer linear stochastic programming model is proposed to assist qualified operators in long-term generation and transmission expansion planning of electricity and gas systems to meet policy objectives. The…
Global warming is one of the main threats to the future of humanity and extensive emissions of greenhouse gases are found to be the main cause of global temperature rise as well as climate change. During the last decades international…
Leveraging a unique dataset of carbon futures option prices traded on the ICE market from December 2015 until December 2020, we present the results from an unprecedented calibration exercise. Within a multifactor stochastic volatility…
We develop a dynamic multi-region climate-economy model with emissions trading and solve for the dynamic Nash equilibrium under noncooperation, where each region follows Paris Agreement-based emissions caps. The permit price reaches $923…
The promising markets for voluntary carbon credits are faced with crippling challenges to the certification of carbon sequestration and the lack of scalable market infrastructure in which companies and institutions can invest in carbon…
To enhance decarbonization efforts in electric power systems, we propose a novel electricity market clearing model that internalizes the allocation of emissions from generations to loads and allows for consideration of consumer-side carbon…
In this paper, we consider a company can simultaneously reduce its emissions and buy carbon allowances at any time. We establish an optimal control model involving two stochastic processes with two control variables, which is a singular…
The integration of renewable energy resources (RES) in the power grid can reduce carbon intensity, but also presents certain challenges. The uncertainty and intermittent nature of RES emphasize the need for flexibility in power systems.…
In this paper we introduce a completely continuous and time-variate model of the evolution of market limit orders based on the existence, uniqueness, and regularity of the solutions to a type of stochastic partial differential equations…
Dynamic grid emission factors provide a temporally resolved signal about the carbon intensity of electricity generation in the power system. Since actual carbon dioxide emission measurements are usually lacking, such a signal must be…
We consider a basic model of multi-period trading, which can be used to evaluate the performance of a trading strategy. We describe a framework for single-period optimization, where the trades in each period are found by solving a convex…
This paper analyzes the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market. Initially, firms can invest both in low-emitting production technologies and…
As global climate change and environmental issues escalate, carbon reduction has emerged as a paramount global concern. Agriculture accounts for approximately 30% of global greenhouse gas emissions, making carbon reduction in this sector…
A transition to a low-carbon electricity supply is crucial to limit the impacts of climate change. Reducing carbon emissions could help prevent the world from reaching a tipping point, where runaway emissions are likely. Runaway emissions…