IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v318y2022ics0306261922004706.html
   My bibliography  Save this article

An evolutionary game-theoretic approach to study the technological transformation of the industrial sector toward renewable electricity procurement: A case study of Iran

Author

Listed:
  • Jamali, Mohammad-Bagher
  • Rasti-Barzoki, Morteza
  • Khosroshahi, Hossein
  • Altmann, Jörn

Abstract

Electricity shortages severely affect the production chain and cause damage to manufacturing productivity. This study examines how the industrial sector can transform technological innovations toward renewable electricity procurement. We consider two strategies for manufacturers: purchasing electricity from a technology-based supplier (TB strategy) and purchasing it from a non-technology-based supplier (NTB strategy). Manufacturers need technological transformation, such as upgrading their electrical system toward digitalization to manage power outages. We examine manufacturers’ pricing decisions and their long-term behavior to adopt the TB and NTB strategies using a one-population evolutionary game-theoretic approach. Also, we investigate the majority of manufacturers’ population that eventually choose the best strategy. Moreover, we apply the present model to real-world cases of Iran’s cement, steel, and paper industries. The results show that the evolutionary behavior of sectors with high annual electricity consumption, such as steel, converges to the TB strategy faster than cement and paper industries. In contrast, the cement and paper industries are more sensitive to subsidy allocation than the steel industry with respect to electricity procurement strategies.

Suggested Citation

  • Jamali, Mohammad-Bagher & Rasti-Barzoki, Morteza & Khosroshahi, Hossein & Altmann, Jörn, 2022. "An evolutionary game-theoretic approach to study the technological transformation of the industrial sector toward renewable electricity procurement: A case study of Iran," Applied Energy, Elsevier, vol. 318(C).
    • Handle: RePEc:eee:appene:v:318:y:2022:i:c:s0306261922004706
    DOI: 10.1016/j.apenergy.2022.119083
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0306261922004706
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2022.119083?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Esmat, Ayman & de Vos, Martijn & Ghiassi-Farrokhfal, Yashar & Palensky, Peter & Epema, Dick, 2021. "A novel decentralized platform for peer-to-peer energy trading market with blockchain technology," Applied Energy, Elsevier, vol. 282(PA).
    2. Wu, Yunna & Zhang, Ting & Gao, Rui & Wu, Chenghao, 2021. "Portfolio planning of renewable energy with energy storage technologies for different applications from electricity grid," Applied Energy, Elsevier, vol. 287(C).
    3. Wang, Jun & Qin, Yanjun & Zhou, Jingyang, 2021. "Incentive policies for prefabrication implementation of real estate enterprises: An evolutionary game theory-based analysis," Energy Policy, Elsevier, vol. 156(C).
    4. Fisher-Vanden, Karen & Mansur, Erin T. & Wang, Qiong (Juliana), 2015. "Electricity shortages and firm productivity: Evidence from China's industrial firms," Journal of Development Economics, Elsevier, vol. 114(C), pages 172-188.
    5. Di Silvestre, Maria Luisa & Favuzza, Salvatore & Riva Sanseverino, Eleonora & Zizzo, Gaetano, 2018. "How Decarbonization, Digitalization and Decentralization are changing key power infrastructures," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 483-498.
    6. Johari, Maryam & Hosseini-Motlagh, Seyyed-Mahdi & Rasti-Barzoki, Morteza, 2019. "An evolutionary game theoretic model for analyzing pricing strategy and socially concerned behavior of manufacturers," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 128(C), pages 506-525.
    7. Tiwari, Aviral Kumar & Eapen, Leena Mary & Nair, Sthanu R, 2021. "Electricity consumption and economic growth at the state and sectoral level in India: Evidence using heterogeneous panel data methods," Energy Economics, Elsevier, vol. 94(C).
    8. Zhu, Chaoping & Fan, Ruguo & Lin, Jinchai, 2020. "The impact of renewable portfolio standard on retail electricity market: A system dynamics model of tripartite evolutionary game," Energy Policy, Elsevier, vol. 136(C).
    9. Xin-gang, Zhao & Ling-zhi, Ren & Yu-zhuo, Zhang & Guan, Wan, 2018. "Evolutionary game analysis on the behavior strategies of power producers in renewable portfolio standard," Energy, Elsevier, vol. 162(C), pages 505-516.
    10. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2020. "A game theoretic approach for car pricing and its energy efficiency level versus governmental sustainability goals by considering rebound effect: A case study of South Korea," Applied Energy, Elsevier, vol. 271(C).
    11. Friedman, Daniel, 1991. "Evolutionary Games in Economics," Econometrica, Econometric Society, vol. 59(3), pages 637-666, May.
    12. Bao, Xiongjiantao & Zhao, Wenhui & Wang, Xiaomei & Tan, Zhongfu, 2019. "Impact of policy mix concerning renewable portfolio standards and emissions trading on electricity market," Renewable Energy, Elsevier, vol. 135(C), pages 761-774.
    13. Amador, Francisco Javier & González, Rosa Marina & Ramos-Real, Francisco Javier, 2013. "Supplier choice and WTP for electricity attributes in an emerging market: The role of perceived past experience, environmental concern and energy saving behavior," Energy Economics, Elsevier, vol. 40(C), pages 953-966.
    14. Xu, Li & Zhang, Qin & Shi, Xunpeng, 2019. "Stakeholders strategies in poverty alleviation and clean energy access: A case study of China's PV poverty alleviation program," Energy Policy, Elsevier, vol. 135(C).
    15. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for assessing residential energy-efficiency program considering rebound, consumer behavior, and government policies," Applied Energy, Elsevier, vol. 233, pages 44-61.
    16. Erdogdu, Erkan, 2014. "Investment, security of supply and sustainability in the aftermath of three decades of power sector reform," Renewable and Sustainable Energy Reviews, Elsevier, vol. 31(C), pages 1-8.
    17. Assarzadegan, Parisa & Hejazi, Seyed Reza & Raissi, Gholam Ali, 2020. "An evolutionary game theoretic model for analyzing retailers’ behavior when introducing economy and premium private labels," Journal of Retailing and Consumer Services, Elsevier, vol. 57(C).
    18. Esmaeili, Parisa & Rafei, Meysam, 2021. "Dynamics analysis of factors affecting electricity consumption fluctuations based on economic conditions: Application of SVAR and TVP-VAR models," Energy, Elsevier, vol. 226(C).
    19. Romeiro, Diogo Lisbona & Almeida, Edmar Luiz Fagundes de & Losekann, Luciano, 2020. "Systemic value of electricity sources – What we can learn from the Brazilian experience?," Energy Policy, Elsevier, vol. 138(C).
    20. Tsao, Yu-Chung & Vu, Thuy-Linh, 2019. "Power supply chain network design problem for smart grid considering differential pricing and buy-back policies," Energy Economics, Elsevier, vol. 81(C), pages 493-502.
    21. Selten, Reinhard, 1988. "Evolutionary stability in extensive two-person games - correction and further development," Mathematical Social Sciences, Elsevier, vol. 16(3), pages 223-266, December.
    22. Defeuilley, Christophe, 2009. "Retail competition in electricity markets," Energy Policy, Elsevier, vol. 37(2), pages 377-386, February.
    23. Yousefi, G.Reza & Kaviri, Sajjad Makhdoomi & Latify, Mohammad Amin & Rahmati, Iman, 2017. "Electricity industry restructuring in Iran," Energy Policy, Elsevier, vol. 108(C), pages 212-226.
    24. Andoni, Merlinda & Robu, Valentin & Flynn, David & Abram, Simone & Geach, Dale & Jenkins, David & McCallum, Peter & Peacock, Andrew, 2019. "Blockchain technology in the energy sector: A systematic review of challenges and opportunities," Renewable and Sustainable Energy Reviews, Elsevier, vol. 100(C), pages 143-174.
    25. Fang, Yujuan & Chen, Laijun & Mei, Shengwei & Wei, Wei & Huang, Shaowei & Liu, Feng, 2019. "Coal or electricity? An evolutionary game approach to investigate fuel choices of urban heat supply systems," Energy, Elsevier, vol. 181(C), pages 107-122.
    26. Heffron, Raphael & Körner, Marc-Fabian & Wagner, Jonathan & Weibelzahl, Martin & Fridgen, Gilbert, 2020. "Industrial demand-side flexibility: A key element of a just energy transition and industrial development," Applied Energy, Elsevier, vol. 269(C).
    27. Xiao, Tiaojun & Yu, Gang, 2006. "Supply chain disruption management and evolutionarily stable strategies of retailers in the quantity-setting duopoly situation with homogeneous goods," European Journal of Operational Research, Elsevier, vol. 173(2), pages 648-668, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yan Li & Jiale Zhang, 2024. "Evolutionary Game Analysis of Low-Carbon Incentive Behaviour of Power Battery Recycling Based on Prospect Theory," Sustainability, MDPI, vol. 16(7), pages 1-24, March.
    2. Li, Xiaozhu & Chen, Laijun & Sun, Fan & Hao, Yibo & Du, Xili & Mei, Shenwei, 2023. "Share or not share, the analysis of energy storage interaction of multiple renewable energy stations based on the evolution game," Renewable Energy, Elsevier, vol. 208(C), pages 679-692.
    3. Jamali, Mohammad-Bagher & Rasti-Barzoki, Morteza & Altmann, Jörn, 2023. "An evolutionary game-theoretic approach for investigating the long-term behavior of the industry sector for purchasing renewable and non-renewable energy: A case study of Iran," Energy, Elsevier, vol. 285(C).
    4. Ning, Jiajun & Xiong, Lixin, 2024. "Analysis of the dynamic evolution process of the digital transformation of renewable energy enterprises based on the cooperative and evolutionary game model," Energy, Elsevier, vol. 288(C).
    5. Lyu, Yuan & He, Yongxiu & Li, Shanzi & Zhou, Jinghan & Tian, BingYing, 2024. "Channeling approach of prosumer connection costs considering regional differences in China — Evolutionary game among distributed photovoltaic entities," Energy, Elsevier, vol. 289(C).
    6. Cezar-Petre Simion & Cătălin-Alexandru Verdeș & Alexandra-Andreea Mironescu & Florin-Gabriel Anghel, 2023. "Digitalization in Energy Production, Distribution, and Consumption: A Systematic Literature Review," Energies, MDPI, vol. 16(4), pages 1-30, February.
    7. Zhang, Mengdi & Shen, Qiao & Zhao, Zhiheng & Wang, Shuaian & Huang, George Q., 2024. "Commitment or rent-seeking? Government incentive policies for ESG reporting in sustainable e-commerce logistics," International Journal of Production Economics, Elsevier, vol. 268(C).
    8. Dan Yu & Caihong Zhang & Siyi Wang & Lan Zhang, 2023. "Evolutionary Game and Simulation Analysis of Power Plant and Government Behavior Strategies in the Coupled Power Generation Industry of Agricultural and Forestry Biomass and Coal," Energies, MDPI, vol. 16(3), pages 1-19, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhao, Tian & Liu, Zhixin & Jamasb, Tooraj, 2022. "Developing hydrogen refueling stations: An evolutionary game approach and the case of China," Energy Economics, Elsevier, vol. 115(C).
    2. Zhao, Dan & Ji, Shou-feng & Wang, He-ping & Jiang, Li-wen, 2021. "How do government subsidies promote new energy vehicle diffusion in the complex network context? A three-stage evolutionary game model," Energy, Elsevier, vol. 230(C).
    3. Jamali, Mohammad-Bagher & Rasti-Barzoki, Morteza, 2022. "A game-theoretic approach for examining government support strategies and licensing contracts in an electricity supply chain with technology spillover: A case study of Iran," Energy, Elsevier, vol. 242(C).
    4. Amiri-Pebdani, Sima & Alinaghian, Mahdi & Khosroshahi, Hossein, 2023. "A game theoretic approach for time-of-use pricing with considering renewable portfolio standard effects and investment in energy storage technologies under government interventions," Energy, Elsevier, vol. 282(C).
    5. Zhang, Mengdi & Shen, Qiao & Zhao, Zhiheng & Wang, Shuaian & Huang, George Q., 2024. "Commitment or rent-seeking? Government incentive policies for ESG reporting in sustainable e-commerce logistics," International Journal of Production Economics, Elsevier, vol. 268(C).
    6. Giulietti, Monica & Le Coq, Chloé & Willems, Bert & Anaya, Karim, 2019. "Smart Consumers in the Internet of Energy : Flexibility Markets & Services from Distributed Energy Resources," Other publications TiSEM 2edb43b5-bbd6-487d-abdf-7, Tilburg University, School of Economics and Management.
    7. Li, Lingyue & Gao, Suixiang & Yang, Wenguo & Xiong, Xing, 2021. "Assessment and improvement of EPA's penalty policy: From the perspective of governments' and ships' behaviors," Transport Policy, Elsevier, vol. 104(C), pages 18-28.
    8. Wang, Delu & Li, Chunxiao & Mao, Jinqi & Yang, Qing, 2023. "What affects the implementation of the renewable portfolio standard? An analysis of the four-party evolutionary game," Renewable Energy, Elsevier, vol. 204(C), pages 250-261.
    9. Gourisetti, Sri Nikhil Gupta & Sebastian-Cardenas, D. Jonathan & Bhattarai, Bishnu & Wang, Peng & Widergren, Steve & Borkum, Mark & Randall, Alysha, 2021. "Blockchain smart contract reference framework and program logic architecture for transactive energy systems," Applied Energy, Elsevier, vol. 304(C).
    10. Silveira, Douglas & Vasconcelos, Silvinha, 2020. "Essays on duopoly competition with asymmetric firms: Is profit maximization always an evolutionary stable strategy?," International Journal of Production Economics, Elsevier, vol. 225(C).
    11. Alessandra Chiarini & Lorenzo Compagnucci, 2022. "Blockchain, Data Protection and P2P Energy Trading: A Review on Legal and Economic Challenges," Sustainability, MDPI, vol. 14(23), pages 1-20, December.
    12. Jiabao Jing & Xiaomei Deng & Rashid Maqbool & Yahya Rashid & Saleha Ashfaq, 2020. "Default Behaviors of Contractors under Surety Bond in Construction Industry Based on Evolutionary Game Model," Sustainability, MDPI, vol. 12(21), pages 1-28, November.
    13. Filipe Bandeiras & Álvaro Gomes & Mário Gomes & Paulo Coelho, 2023. "Exploring Energy Trading Markets in Smart Grid and Microgrid Systems and Their Implications for Sustainability in Smart Cities," Energies, MDPI, vol. 16(2), pages 1-41, January.
    14. Jiahuan He & Xinggang Luo & Zhongliang Zhang & Yang Yu, 2021. "Strategic Analysis of Participants in the Provision of Elderly Care Services—An Evolutionary Game Perspective," IJERPH, MDPI, vol. 18(16), pages 1-27, August.
    15. Hosseini-Motlagh, Seyyed-Mahdi & Choi, Tsan-Ming & Johari, Maryam & Nouri-Harzvili, Mina, 2022. "A profit surplus distribution mechanism for supply chain coordination: An evolutionary game-theoretic analysis," European Journal of Operational Research, Elsevier, vol. 301(2), pages 561-575.
    16. Kuiran Shi & Hujie Ma, 2016. "Evolution Of Trust In A Dual-Channel Supply Chain Considering Reciprocal Altruistic Behavior," Advances in Complex Systems (ACS), World Scientific Publishing Co. Pte. Ltd., vol. 19(06n07), pages 1-30, September.
    17. Sun, Wenjun & Zhu, Changfeng & Li, Hui, 2022. "Evolutionary game of emergency logistics path selection under bounded rationality," Socio-Economic Planning Sciences, Elsevier, vol. 82(PB).
    18. Huang, Xingjun & Lin, Yun & Lim, Ming K. & Zhou, Fuli & Ding, Rui & Zhang, Zusheng, 2022. "Evolutionary dynamics of promoting electric vehicle-charging infrastructure based on public–private partnership cooperation," Energy, Elsevier, vol. 239(PD).
    19. Maurizio Sibilla & Esra Kurul, 2023. "Towards Social Understanding of Energy Storage Systems—A Perspective," Energies, MDPI, vol. 16(19), pages 1-11, September.
    20. Heymann, Fabian & Milojevic, Tatjana & Covatariu, Andrei & Verma, Piyush, 2023. "Digitalization in decarbonizing electricity systems – Phenomena, regional aspects, stakeholders, use cases, challenges and policy options," Energy, Elsevier, vol. 262(PB).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:318:y:2022:i:c:s0306261922004706. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.