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Unlocking emerging impacts of carbon tax on integrated energy systems through supply and demand co-optimization

Wang, Meng, Yu, Hang, Yang, Yikun, Lin, Xiaoyu, Guo, Haijin, Li, Chaoen, Zhou, Yue and Jing, Rui 2021. Unlocking emerging impacts of carbon tax on integrated energy systems through supply and demand co-optimization. Applied Energy 302 , 117579. 10.1016/j.apenergy.2021.117579

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Integrated energy systems (IES) can help achieve greater energy efficiency, and then ultimately promote a climate-neutral economy by utilizing local renewable resources. Demand-side energy-saving measures can reduce operational costs associated with energy usage. Most existing IES models, however, focus on supply-side optimization, while the demand-side energy-saving potential and its impacts on whole-system performance are still not clear. The increasing carbon tax makes it even more important to understand the interactions between supply and demand sides to achieve a sustainable system with a minimal carbon charge. Hence, this study proposes a co-optimization model to simultaneously optimize the supply and demand sides of an IES considering the impact of the carbon tax. A selection tree is developed to describe various demand-side envelope upgrading technologies, and a binary tree is established by generating a set of supply-side scenarios with corresponding probabilities. Based on these results, an improved two-stage stochastic programming model is proposed. The robustness of the modeling results was further validated by a simulation–optimization-based uncertainty analysis addressing price uncertainties. A case study in Shanghai indicates that the proposed co-optimization model achieves more cost-efficient solutions than supply-side-only optimization considering carbon tax. Introducing carbon tax can reduce the installed capacity of fuel-based energy technologies by up to 24% and greatly accelerate the penetration of renewables. The increasing carbon tax also promotes the adoption of more advanced energy-saving technologies. Uncertainty analysis reveals acceptable robustness of the optimal demand-side scheme and supply-side configuration with a deviation of less than 5% and a coefficient of variation of 7%. Overall, the observations of the proposed model and case study provide valuable insights for IES design considering an emerging charge of carbon tax.

Item Type: Article
Date Type: Publication
Status: Published
Schools: Engineering
Publisher: Elsevier
ISSN: 0306-2619
Date of First Compliant Deposit: 9 September 2021
Date of Acceptance: 8 August 2021
Last Modified: 17 Aug 2022 16:30

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