IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v262y2023ipas0360544222023222.html
   My bibliography  Save this article

Game-theoretic modeling of power supply chain coordination under demand variation in China: A case study of Guangdong Province

Author

Listed:
  • Tian, Xiaoge
  • Chen, Weiming
  • Hu, Jinglu

Abstract

Entities in the power supply chain usually tend to cooperate with each other for higher profits. The inter mechanism between the entities and power supply chain is an urgent research subject. To consider the power supply chain and entities better, a extended model of bilateral contract mechanism is proposed in this paper. Utilizing a Stackelberg game, this paper studies dynamic coordination and strategic interactions between power plants, power retailers, and consumers in the electricity trading process under demand uncertainty. An improved coordination model is proposed to help entities get potential profits as well as improve the stability of the power supply. The model is applied to power trading data from Guangdong, China which imposes penalties for inaccuracies in demand variation. Simulations suggest the model's solution exhibits higher reliability and minimizes fines.

Suggested Citation

  • Tian, Xiaoge & Chen, Weiming & Hu, Jinglu, 2023. "Game-theoretic modeling of power supply chain coordination under demand variation in China: A case study of Guangdong Province," Energy, Elsevier, vol. 262(PA).
    • Handle: RePEc:eee:energy:v:262:y:2023:i:pa:s0360544222023222
    DOI: 10.1016/j.energy.2022.125440
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544222023222
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2022.125440?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. Dagoumas, Athanasios S. & Polemis, Michael L., 2017. "An integrated model for assessing electricity retailer’s profitability with demand response," Applied Energy, Elsevier, vol. 198(C), pages 49-64.
    2. Ying, Zhou & Xin-gang, Zhao, 2021. "The impact of Renewable Portfolio Standards on carbon emission trading under the background of China’s electricity marketization reform," Energy, Elsevier, vol. 226(C).
    3. Kelle, Peter & Akbulut, Asli, 2005. "The role of ERP tools in supply chain information sharing, cooperation, and cost optimization," International Journal of Production Economics, Elsevier, vol. 93(1), pages 41-52, January.
    4. Wang, Xiaofei & Liu, Chuangeng & Chen, Shaojie & Chen, Lei & Li, Ke & Liu, Na, 2020. "Impact of coal sector’s de-capacity policy on coal price," Applied Energy, Elsevier, vol. 265(C).
    5. Ju, Liwei & Wu, Jing & Lin, Hongyu & Tan, Qinliang & Li, Gen & Tan, Zhongfu & Li, Jiayu, 2020. "Robust purchase and sale transactions optimization strategy for electricity retailers with energy storage system considering two-stage demand response," Applied Energy, Elsevier, vol. 271(C).
    6. Yin, Zhenyuan & Wan, Qing-Cui & Gao, Qiang & Linga, Praveen, 2020. "Effect of pressure drawdown rate on the fluid production behaviour from methane hydrate-bearing sediments," Applied Energy, Elsevier, vol. 271(C).
    7. Ayman Alhejji & Alban Kuriqi & Jakub Jurasz & Farag K. Abo-Elyousr, 2021. "Energy Harvesting and Water Saving in Arid Regions via Solar PV Accommodation in Irrigation Canals," Energies, MDPI, vol. 14(9), pages 1-24, May.
    8. Fioriti, Davide & Frangioni, Antonio & Poli, Davide, 2021. "Optimal sizing of energy communities with fair revenue sharing and exit clauses: Value, role and business model of aggregators and users," Applied Energy, Elsevier, vol. 299(C).
    9. Yu, Dongmin & liu, Huanan & Bresser, Charis, 2018. "Peak load management based on hybrid power generation and demand response," Energy, Elsevier, vol. 163(C), pages 969-985.
    10. Fernandez, Edstan & Hossain, M.J. & Nizami, M.S.H., 2018. "Game-theoretic approach to demand-side energy management for a smart neighbourhood in Sydney incorporating renewable resources," Applied Energy, Elsevier, vol. 232(C), pages 245-257.
    11. Dadashi, Mojtaba & Haghifam, Sara & Zare, Kazem & Haghifam, Mahmoud-Reza & Abapour, Mehdi, 2020. "Short-term scheduling of electricity retailers in the presence of Demand Response Aggregators: A two-stage stochastic Bi-Level programming approach," Energy, Elsevier, vol. 205(C).
    12. Yong He & Xuan Zhao, 2016. "Contracts and coordination: Supply chains with uncertain demand and supply," Naval Research Logistics (NRL), John Wiley & Sons, vol. 63(4), pages 305-319, June.
    13. Akhtari, Shaghaygh & Sowlati, Taraneh & Griess, Verena C., 2018. "Integrated strategic and tactical optimization of forest-based biomass supply chains to consider medium-term supply and demand variations," Applied Energy, Elsevier, vol. 213(C), pages 626-638.
    14. Zhao, Ning & You, Fengqi, 2019. "Dairy waste-to-energy incentive policy design using Stackelberg-game-based modeling and optimization," Applied Energy, Elsevier, vol. 254(C).
    15. Wang, Qiang & Chen, Xi, 2012. "China's electricity market-oriented reform: From an absolute to a relative monopoly," Energy Policy, Elsevier, vol. 51(C), pages 143-148.
    16. Sarker, Bhaba R. & Al Kindi, Mahmood, 2006. "Optimal ordering policies in response to a discount offer," International Journal of Production Economics, Elsevier, vol. 100(2), pages 195-211, April.
    17. Charwand, Mansour & Gitizadeh, Mohsen & Siano, Pierluigi, 2017. "A new active portfolio risk management for an electricity retailer based on a drawdown risk preference," Energy, Elsevier, vol. 118(C), pages 387-398.
    18. Bhatti, Bilal Ahmad & Broadwater, Robert, 2019. "Energy trading in the distribution system using a non-model based game theoretic approach," Applied Energy, Elsevier, vol. 253(C), pages 1-1.
    19. Marí, L. & Nabona, N. & Pagès-Bernaus, A., 2017. "Medium-term power planning in electricity markets with pool and bilateral contracts," European Journal of Operational Research, Elsevier, vol. 260(2), pages 432-443.
    20. Wang, Bohong & Klemeš, Jiří Jaromír & Liang, Yongtu & Yuan, Meng & Zhang, Haoran & Liu, Jiayi, 2020. "Implementing hydrogen injection in coal-dominated regions: Supply chain optimisation and reliability analysis," Energy, Elsevier, vol. 201(C).
    21. Wang, Tiantian & Zhang, Dayong & Ji, Qiang & Shi, Xunpeng, 2020. "Market reforms and determinants of import natural gas prices in China," Energy, Elsevier, vol. 196(C).
    22. Nagarajan, Mahesh & Sosic, Greys, 2008. "Game-theoretic analysis of cooperation among supply chain agents: Review and extensions," European Journal of Operational Research, Elsevier, vol. 187(3), pages 719-745, June.
    23. John W. Mamer, 1987. "Discounted and Per Unit Costs of Product Warranty," Management Science, INFORMS, vol. 33(7), pages 916-930, July.
    24. Joung, Manho & Kim, Jinho, 2013. "Assessing demand response and smart metering impacts on long-term electricity market prices and system reliability," Applied Energy, Elsevier, vol. 101(C), pages 441-448.
    25. Oliveira, Fernando S. & Ruiz, Carlos & Conejo, Antonio J., 2013. "Contract design and supply chain coordination in the electricity industry," European Journal of Operational Research, Elsevier, vol. 227(3), pages 527-537.
    26. Yingxue Zhao & Xiaoge Meng & Shouyang Wang & T. C. Edwin Cheng, 2016. "Coordination of Supply Chains with Bidirectional Option Contracts," International Series in Operations Research & Management Science, in: Contract Analysis and Design for Supply Chains with Stochastic Demand, edition 1, chapter 0, pages 115-129, Springer.
    27. Zabarankin, Michael & Pavlikov, Konstantin & Uryasev, Stan, 2014. "Capital Asset Pricing Model (CAPM) with drawdown measure," European Journal of Operational Research, Elsevier, vol. 234(2), pages 508-517.
    28. Almorox, Javier & Voyant, Cyril & Bailek, Nadjem & Kuriqi, Alban & Arnaldo, J.A., 2021. "Total solar irradiance's effect on the performance of empirical models for estimating global solar radiation: An empirical-based review," Energy, Elsevier, vol. 236(C).
    29. Zhou, Anhua & Li, Jun, 2021. "Investigate the impact of market reforms on the improvement of manufacturing energy efficiency under China’s provincial-level data," Energy, Elsevier, vol. 228(C).
    30. Tsimopoulos, Evangelos G. & Georgiadis, Michael C., 2021. "Nash equilibria in electricity pool markets with large-scale wind power integration," Energy, Elsevier, vol. 228(C).
    31. Aghamohammadloo, Hossein & Talaeizadeh, Valiollah & Shahanaghi, Kamran & Aghaei, Jamshid & Shayanfar, Heidarali & Shafie-khah, Miadreza & Catalão, João P.S., 2021. "Integrated Demand Response programs and energy hubs retail energy market modelling," Energy, Elsevier, vol. 234(C).
    32. Kuriqi, Alban & Pinheiro, António N. & Sordo-Ward, Alvaro & Bejarano, María D. & Garrote, Luis, 2021. "Ecological impacts of run-of-river hydropower plants—Current status and future prospects on the brink of energy transition," Renewable and Sustainable Energy Reviews, Elsevier, vol. 142(C).
    33. Gérard P. Cachon & Martin A. Lariviere, 2005. "Supply Chain Coordination with Revenue-Sharing Contracts: Strengths and Limitations," Management Science, INFORMS, vol. 51(1), pages 30-44, January.
    Full references (including those not matched with items on IDEAS)

    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. Qian, Long & Xu, Xiaolin & Sun, Ying & Zhou, Yunjie, 2022. "Carbon emission reduction effects of eco-industrial park policy in China," Energy, Elsevier, vol. 261(PB).
    2. Pang, Qinghua & Dong, Xianwei & Zhang, Lina & Chiu, Yung-ho, 2023. "Drivers and key pathways of the household energy consumption in the Yangtze river economic belt," Energy, Elsevier, vol. 262(PA).
    3. Mohammad Hossein Nejati Amiri & Mehdi Mehdinejad & Amin Mohammadpour Shotorbani & Heidarali Shayanfar, 2023. "Heuristic Retailer’s Day-Ahead Pricing Based on Online-Learning of Prosumer’s Optimal Energy Management Model," Energies, MDPI, vol. 16(3), pages 1-21, January.
    4. Soleimani, Borhan & Keihan Asl, Dariush & Estakhr, Javad & Seifi, Ali Reza, 2022. "Integrated optimization of multi-carrier energy systems: Water-energy nexus case," Energy, Elsevier, vol. 257(C).
    5. Huo, Zhihong & Xu, Chang, 2022. "Distributed cooperative automatic generation control and multi-event triggered mechanisms co-design for networked wind-integrated power systems," Renewable Energy, Elsevier, vol. 193(C), pages 41-56.
    6. Shen, Jian-jian & Cheng, Chun-tian & Jia, Ze-bin & Zhang, Yang & Lv, Quan & Cai, Hua-xiang & Wang, Bang-can & Xie, Meng-fei, 2022. "Impacts, challenges and suggestions of the electricity market for hydro-dominated power systems in China," Renewable Energy, Elsevier, vol. 187(C), pages 743-759.
    7. Paolo Falbo & Carlos Ruiz, 2021. "Joint optimization of sales-mix and generation plan for a large electricity producer," Papers 2110.02016, arXiv.org.
    8. Dzido, Aleksandra & Wołowicz, Marcin & Krawczyk, Piotr, 2022. "Transcritical carbon dioxide cycle as a way to improve the efficiency of a Liquid Air Energy Storage system," Renewable Energy, Elsevier, vol. 196(C), pages 1385-1391.
    9. Weraikat, Dua & Zanjani, Masoumeh Kazemi & Lehoux, Nadia, 2016. "Two-echelon pharmaceutical reverse supply chain coordination with customers incentives," International Journal of Production Economics, Elsevier, vol. 176(C), pages 41-52.
    10. Zhisong Chen & Li Fang & Shong-Iee Ivan Su, 2021. "The value of offline channel subsidy in bricks and clicks: an O2O supply chain coordination perspective," Electronic Commerce Research, Springer, vol. 21(2), pages 599-643, June.
    11. Lu Hsiao & Ying‐Ju Chen & Hui Xiong, 2019. "Supply chain coordination with product line design and a revenue sharing scheme," Naval Research Logistics (NRL), John Wiley & Sons, vol. 66(3), pages 213-229, April.
    12. Palsule-Desai, Omkar D. & Tirupati, Devanath & Chandra, Pankaj, 2013. "Stability issues in supply chain networks: Implications for coordination mechanisms," International Journal of Production Economics, Elsevier, vol. 142(1), pages 179-193.
    13. Panda, S. & Modak, N.M. & Basu, M. & Goyal, S.K., 2015. "Channel coordination and profit distribution in a social responsible three-layer supply chain," International Journal of Production Economics, Elsevier, vol. 168(C), pages 224-233.
    14. Jovan, David Jure & Dolanc, Gregor & Pregelj, Boštjan, 2022. "Utilization of excess water accumulation for green hydrogen production in a run-of-river hydropower plant," Renewable Energy, Elsevier, vol. 195(C), pages 780-794.
    15. Falbo, Paolo & Ruiz, Carlos, 2019. "Optimal sales-mix and generation plan in a two-stage electricity market," Energy Economics, Elsevier, vol. 78(C), pages 598-614.
    16. Lu, Lijian & Wu, Yaozhong, 2015. "Preferences for contractual forms in supply chains," European Journal of Operational Research, Elsevier, vol. 241(1), pages 74-84.
    17. Wen, Wen & Zhang, Qin, 2015. "A design of straw acquisition mode for China's straw power plant based on supply chain coordination," Renewable Energy, Elsevier, vol. 76(C), pages 369-374.
    18. Morteza Neishaboori & Alireza Arshadi Khamseh & Abolfazl Mirzazadeh & Mostafa Esmaeeli & Hamed Davari Ardakani, 2024. "Stochastic optimal pricing for retail electricity considering demand response, renewable energy sources and environmental effects," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 23(5), pages 435-451, October.
    19. Ghosh, Debabrata & Shah, Janat, 2012. "A comparative analysis of greening policies across supply chain structures," International Journal of Production Economics, Elsevier, vol. 135(2), pages 568-583.
    20. Cheng-Chang Lin & Chao-Chen Hsieh, 2012. "A Cooperative Coalitional Game in Duopolistic Supply-Chain Competition," Networks and Spatial Economics, Springer, vol. 12(1), pages 129-146, March.

    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:energy:v:262:y:2023:i:pa:s0360544222023222. 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.journals.elsevier.com/energy .

    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.