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Bi-level multi-objective distribution strategy integrating the permit trading scheme towards coal production capacity layout optimization: Case study from China

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  • Xu, Jiuping
  • Shu, Kejing
  • Wang, Fengjuan
  • Yang, Guocan

Abstract

As a basic energy resource, scientific planning for the coal production capacity is critical for the sustainable energy development. To optimize coal production capacity layouts, this study developed a novel bi-level multi-objective model (BMS) that considered the authority-colliery interactions, balanced the economic benefit, environmental protection, and coal production reduction objectives, and incorporated a capacity permits trading scheme to enhance execution efficiency. An interactive algorithm is designed to search for the solutions of the proposed model. To demonstrate practicality, a real case study was conducted in Shandong Province, China. The results indicate that due to the different resource endowments and operating conditions, the production capacity layout and the production strategy among multiple collieries is quite different. Compared with the original authority strategy (AS), the economic benefits of the BMS increases by 2.1%, the environmental regulation costs of BMS decreases 11.08% and the coal production of BMS deceases 12.30%, indicating the superiority of the BMS. To provide insights into the coordination of diverse stakeholders and identify the trade-offs between the conflicting objectives, sensitivity analyses were conducted on the policy attitude parameters and the objective preferences. The proposed model was found to be an effective coal production capacity layout governance decision-making reference for Chinese authorities as it provides a realistic representation of the complex game process and real-world influencing factors in China's coal production capacity layout systems.

Suggested Citation

  • Xu, Jiuping & Shu, Kejing & Wang, Fengjuan & Yang, Guocan, 2024. "Bi-level multi-objective distribution strategy integrating the permit trading scheme towards coal production capacity layout optimization: Case study from China," Resources Policy, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:jrpoli:v:91:y:2024:i:c:s0301420724002617
    DOI: 10.1016/j.resourpol.2024.104894
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