Optimal Operation Model of Two-level Electricity Market Under the Responsibility of Renewable Energy Consumption

Considering the implementation of China's renewable energy (RE) consumption guarantee mechanism as the background, in order to enable consumers of a province to complete a consumption assessment, the market mechanism must be used to encourage renewable energy consumption across provinces and regions. A two-level electricity market has been established, and interprovincial renewable energy dealers have been introduced to act as agents of consumers to buy RE from interprovincial RE markets. Under the two-level market framework, a non-linear bilevel optimization model is established with the objective of minimizing market operating costs, and the clearing results of the upper and lower levels are used as the calculation parameters for the other level. Using the Karush-Kuhn-Tucker conditions and Lagrange duality theory, the nonlinear bilevel problem is transformed into a single-layer linear problem. Finally, in order to verify the effectiveness of the proposed model, an example of a certain area is simulated to analyze the market operating costs under different quota ratios and prices of green certificates. The results show that the two- level market can effectively reduce the market cost and promote the interprovincial consumption of RE.