Abstract: The existing quantity of on-grid electricity of electricity suppliers is mainly determined according to the proportion of its generation capacity, but the on-grid electricity tariff is the unified benchmark price. Based on the principle of minimum total generation cost under the constraint of carbon emissions, this paper designs the allocation mechanism of on-grid electricity quantity and its tariff mechanism in oligopoly power market, and makes a comparison with the existing on-grid electricity mechanism. The results show that: (1) the new mechanism can encourage electricity suppliers to report their true cost types to ensure the implementation of the minimum total generation cost under the constraint of carbon emissions; (2) compared to the existing mechanisms, the new mechanism can help to reduce carbon dioxide emissions, and save the total generation cost at the same level of carbon emissions;(3) the new mechanism gives priority to low-emission electricity suppliers, which can help to make the high-emission units gradually exit the market.

Key words: on-grid mechanism, carbon emission reduction, mechanism design, electricity market