Abstract: Thermal power is a main power supply source in China, but its environmental pollution is severe. Southwest China is rich in hydropower but faces the problem of abandoning surplus water and power. Reducing the competition between hydropower and thermal power will be conducive to efficient energy use and carbon emission reduction. Herein we take the hydropower of Lancang River as a case study of the cooperative game between hydropower and thermal power in China Southern Power Grid, and develop an optimization model for the Lancang River cascade hydropower operation and a cooperative game model for hydropower and thermal power cooperation. An improved Shapley value method is constructed to allocate the incremental benefit. Based on the models, we analyze the effect of the hydrological conditions, coal price, and green certificate quota on the cooperative game. The results show that an increase in water availability and green certificate quota can enlarge the cooperation space, while the effect of coal price change on the overall benefit of cooperation is insignificant. Considering environmental costs, hydropower companies will benefit more. Thus, we suggest a green certificate system be established to enlarge the cooperation space of hydropower and thermal power, helping achieve the goals of carbon peaking and carbon neutralization.

Key words: hydropower consumption, Lancang River, Shapley value method, green certificate