To solve the problem of coordinated decision-making in the electricity and carbon markets caused by the interdependence between “electricity” and “CO2” of coal-fired generators

this paper proposes a two-stage dynamic decision-making method for coal-fired generators to participate in the electricity-carbon coupling market

considering the dynamic decomposition of carbon emission allowance (CEA). First

to solve the problems of different trading rules and asynchronous trading cycles in the two markets

this paper proposes a rolling decision-making framework based on risk sharing to realize the multi-time scale coupling decision- making. Secondly

a two-stage rolling decision-making model for coal-fired generators is constructed. In stage 1

the initial CEA allocation on a long-time scale is realized based on the CEA dynamic decomposition model

and in stage 2

a multi-market bi-level bidding strategy model on a short time scale is formulated

in which the maximum profit model of coal-fired generators is constructed in the upper level and the electricity and carbon market clearing model is constructed in the lower level. Then

the bi-level model is transformed into a single-level mathematical program with equilibrium constraints (MPEC) problem using the Karush-Kuhn-Tucker (KKT) optimal condition

and transformed into a mixed-integer linear programming model based on strong duality theory and Big-M method. Finally

case results show that the operating income of coal-fired generators can be improved by optimizing the CEA decomposition strategy.