Joint Strategic Bidding for Iron-and-Steel Enterprises in Electricity and Carbon Markets

Iron-and-steel enterprises (ISEs) take vital roles in modern society. However, high electricity prices and strict carbon emission caps greatly influence the profitability of ISEs. To bridge this gap, this paper investigates the joint bidding strategy for ISEs in electricity and carbon markets considering detailed industrial processes. Firstly, the material-electricity-carbon flow model is proposed to capture the electricity consumption and carbon emission characteristics of the industrial processes. Then, the strategic bidding model of ISE is constituted as a bi-level model, in which the upper-level models the optimal bidding of ISE, and the clearing of the carbon and power markets are represented by two lower-level problems. Towards a computationally efficient solution method, the lower-level problem of electricity market clearing is equivalently reformulated by its KKT condition. The strong duality theorem and the big-M method are used to linearize the bi-linear terms. Finally, the bi-level model is transformed into a mixed-integer linear programming (MILP) problem. and the IEEE 30-node case is used to validate the effectiveness and computational efficiency of the proposed method.