Distributed Energy and Carbon Emission Right Trading in Local Energy Systems Considering the Emission Obligation on Demand Side

The power sector is a major source of carbon emissions. To realize emission reduction, distributed energy resources (DERs), such as rooftop photovoltaics (PVs), are developing rapidly. To accommodate numerous emerging DERs, local energy systems (LES) and peer-to-peer (P2P) trading have aroused more and more attention. In this article, a P2P energy trading model is proposed to enable LESs to accommodate numerous emerging DERs and to reduce carbon emissions from the power sector by considering the emission obligation on the demand side. In the proposed distributed transaction framework, it is pointed out that demands are the underlying driver of carbon emissions. Therefore, a double taxation mechanism is considered. Free quotas are allocated to the prosumers on the demand side. If the indirect emission of the consumer exceeds the allocated free quotas, it has to purchase additional carbon emission rights (CERs) in a local integrated carbon and electricity market. First, an energy dispatch model in the distribution system is proposed to solve the power flow. Second, based on the power flow, the carbon emission flow model is utilized to track the emission from the generation side to the demand side. Third, CER trading is then integrated into the P2P trading model to encourage local transactions between prosumers. The formulated problem is solved through a distributed optimization algorithm to enhance the computation efficiency and protect the private information of prosumers. The proposed framework and methodology are verified in case studies. © 2023 IEEE.