Incentivizing energy and carbon rights transactions among network-constrained energy hubs: Cooperative game with externalities

Gan, Wei, Yan, Mingyu, Zhou, Yue ORCID: https://orcid.org/0000-0002-6698-4714, Shu, Kangan, Yao, Wei and Wen, Jinyu 2024. Incentivizing energy and carbon rights transactions among network-constrained energy hubs: Cooperative game with externalities. Renewable and Sustainable Energy Reviews 203 , 114771. 10.1016/j.rser.2024.114771 Item availability restricted.

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Abstract

Joint energy and carbon rights transactions for multiple energy hubs could boost the utilization of renewable distributed energy resources and reduce carbon emissions in energy sectors. The joint transaction mechanism based on the cooperative game is proposed, in which cooperative energy hubs form a grand coalition to share diverse forms of energy and carbon rights in order to maximize their total benefit. Furthermore, the grand coalition-based transaction mechanism is augmented with network constraints to account for the influence of network constraints on the trading behaviors of energy hubs, which is mathematically represented as a cooperative game with externalities. In addition, mathematical proof is provided to demonstrate the stability of the formed network-constrained grand coalition. To determine the trading behaviors and allocate payoff among energy hubs while satisfying both network constraints and coalition stability, a scalable two-stage optimization structure is provided, with the first stage ensuring coalition stability and the second preventing network constraint violations. A solution technique combined with Karush-Kuhn-Tucker conditions and Benders decomposition is proposed to solve the two-stage optimization problem. The effectiveness and scalability of the proposed joint transaction mechanism and the solution technique are supported by numerical results for the 4-EH and 33-EH systems. The introduction of the carbon market leads to a 20.6 % reduction in carbon emissions and a 10.5 % increase in total payoff by facilitating peer-to-peer trading of both energy and carbon rights.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Engineering
Publisher:	Elsevier
ISSN:	1364-0321
Date of First Compliant Deposit:	2 September 2024
Date of Acceptance:	16 July 2024
Last Modified:	17 Dec 2024 11:45
URI:	https://orca.cardiff.ac.uk/id/eprint/171171

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