Purpose – The efficiency of the emission trading system (ETS) may help to control the total emission amount. The purpose of this paper is to investigate the generating cost issue in environmental/economic power dispatch, under the premise that the ETS has already been established. Design/methodology/approach – The emission benefit and price level factors are introduced for transforming the bi‐objective optimization problem with the fuel cost and emission cost minimization into a single objective. In the developed mathematical model, both the total emission amount from all units and the permitted emission amount from each generating unit are taken into account. The successive linear programming method is employed to solve the optimization problem. Findings – Simulation results of the IEEE 30‐bus test system show that a proper trading mechanism of emission permits is very important for generation companies to control the total emission amount and to reduce the overall generation cost. Research limitations/implications – Further research is needed to find out the impact on the generating cost caused by trading price fluctuation and the coping strategies. Originality/value – The results can help to meet the requirements of current generating optimal dispatch.
International Journal of Energy Sector Management – Emerald Publishing
Published: Sep 13, 2011
Keywords: Emissions trading system; Emission penalty factor; Power dispatch; Emission permits; Environmental factors; Economic factors; Fuels; Emission