Decision optimization in the linked electricity market at multi-timescale: Integrating coupled tradable green certificate and green power trading

Achieving the national climate target would depend on national actions. China has implemented important market mechanisms for a green and low-carbon energy transition, including the Renewable Portfolio Standard (RPS), the Tradable Green Certificate (TGC) market, the green power trading market, and so on. However, how to effectively integrate coupled TGC and green power trading to achieve a balance between maximizing economic benefits and environmental friendliness remains to be explored. Therefore, this study extends prior research by establishing a bi-level decision optimization model to explore market participants' decision making from the perspective of energy supply and economic value, and analyzes the impact of the RPS, TGC price, and the penetration of renewable energy (RE) in the electricity market, the green power market, and the trading strategy of market participants in a multi-market equilibrium state. The feasibility and effectiveness of the bi-level decision optimization model and algorithm are verified using the example of IEEE14 node and historical data of Elia Energy. The results show that: (1) Under the market equilibrium condition, the clearing price in the day-ahead RE market is equal to the clearing price in the day-ahead traditional energy market plus the TGC price. (2) When green power participates in the spot market, there is a complementary relationship between RE generation and traditional energy generation. (3) A shift from decreasing to increasing costs for electricity consumers when RE penetration is above a certain threshold (alpha>30%) and the TGC price is 100 CNY/MWh, and a decrease in the growth rate of RE generators' profits when RE penetration is above a certain threshold (alpha>35%). (4) Traditional energy generators with small installed capacities adopt riskier market behaviors to declare more electricity and try to obtain higher profit in market transactions. These insights can make up for the research gap of decision optimization in multi-timescale electricity market, achieve energy optimization allocation and environmental sustainability.