Emission-concerned economic dispatch: Possible formulations and implementations

This paper presents mathematical formulations of economic dispatch problems in electricity markets under three emission-concerned policy alternatives: carbon dioxide tax, carbon dioxide quota, and carbon dioxide cap-and-trade. The three formulations are shown to be temporally decomposable using Lagrangian relaxation methods. Computationally efficient algorithms are proposed for implementing the emission-concerned economic dispatch. Numerical examples are illustrated on an IEEE 14-bus system. The proposed formulations and algorithms can serve as a framework for systematic engineering, economic, and policy solutions towards a low-carbon electricity sector.