Sensitivity study of key factors influencing emission market based on hybrid simulations

As an effective measure for regulating the greenhouse gas emissions, Emission Trading Scheme (ETS) has been widely implemented. Market designers and participants are in urgent need of decision-support tools with quantitative risk analysis capability. However, one of the biggest challenges lies in that the physical laws, economic laws and human behaviors are intertwined in the emission risk prevention and control problem. While the physical laws and economic laws can be modeled mathematically, human behaviors cannot be easily modeled. In this paper, a hybrid simulation method is adopted for the sensitivity analysis of different factors influencing emission market. First, the interactions between the power system and the climate system are examined and the hybrid simulation method is introduced. Second, based on the hybrid simulation, sensitivity analysis of key influencing factors on emission price is conducted. Finally, based on the practices of a power system blackout defense system that has been developed by the authors, an emission risk prevention and control framework is proposed.