Towards net zero: Comprehensive approach for voluntary carbon trading among microgrids

Abstract

In the context of growing focus over climate changes and promoting sustainability across a various range of fields, microgrids can play a significant role in global decarbonization endeavors, contributing to carbon neutrality and ultimately attaining net-zero emissions in the energy sector. The objective of this paper is to address the integration of voluntary carbon trading within microgrid communities, in the perspective to mitigate greenhouse gas (GHG) emissions and boost the integration of renewable energy sources (RES). Introducing five modular algorithms managing key aspects of carbon trading, the study engineers a comprehensive framework aiming to optimally orchestrate the Voluntary Carbon Market (VCM) within microgrids. Particularly, the developed algorithms address aspects such as market enrollment decision, optimal energy dispatch, managing the market transactions, sellers-buyers matching as well as the dynamic adjustment of carbon credit prices and emission taxes. The framework has been rigorously tested across three distinct scenarios. Results show that the developed VCM, with adequate configurations, has the potential to incentivize microgrids to curtail their GHG emissions, encourage the integration of more RES into their generation mix, and rewards the more proactive microgrids with substantial financial incentives.

Keywords

• Optimal carbon trading
• Microgrids
• Market entry game
• Voluntary carbon market
• Carbon credits