Optimal Allocation of Electromagnetic Pollution Emission Rights in Power Quality Markets

Power quality (PQ) is an issue that is becoming increasingly important to electricity consumption. How to design a market mechanism for power quality exchange becomes acute more and more. Due to its systematic property, a managed power quality market (PQM) should be organized. In this paper, a novel competing model involving two-price bidding of demand side and marginal cost bidding of supply side is presented to optimize the allocation of emission right (ER) among the consumers in a managed PQM. The uniform price for the basic emission capacity can help to reduce the risks in markets, and the ultimate allocation can maximize the total system utility because the trading between suppliers and consumers occurs at the point of market equilibrium. An example is given to illustrate the rationality and feasibility of the proposed model.