Production Cost Minimization Considering Integrated Carbon and Electricity Trading System

TAŞ E., GÖKÇEK T., ERDİNÇ O., ATEŞ Y.

14th International Conference on Electrical and Electronics Engineering, ELECO 2023, Virtual, Bursa, Turkey, 30 November - 02 December 2023, (Full Text) identifier

  • Publication Type: Conference Paper / Full Text
  • Doi Number: 10.1109/eleco60389.2023.10415974
  • City: Virtual, Bursa
  • Country: Turkey
  • Keywords: cap-and-trade scheme, Carbon credits, integrated carbon and electricity trading, production
  • Manisa Celal Bayar University Affiliated: No

Abstract

This study presents a production decision model that minimizes costs in an industrial production plant for carbon and electricity consumption under a joint carbon-electricity trading system. The motivation is to offer users a way to reduce their production costs within this integrated carbon and electricity trading framework. The model utilizes a cap-and-trade scheme for carbon trading and takes into account hourly electricity prices, carbon credit prices, electricity consumption required for production, and carbon emissions during production. Using the Mixed Integer Programming method, the optimization model effectively minimizes costs, leading to significant savings.