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The promotion of community energy projects in Chile and Scotland: An economic approach using biform games

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  • Fuentes González, Fabián
  • van der Weijde, Adriaan Hendrik
  • Sauma, Enzo

Abstract

We model simple and novel three-player bi-form coalitional games to analyse community energy projects in Chile and Scotland. We take into account two methods based on biform games, which deal with games with a non-empty Core and an empty Core, respectively, and construct models based on real-world data on community energy projects, net billing (or distributed generation) schemes, and ordinary utility contracts. We then use these to derive insights about the economic-strategic viability of community energy projects, in the sense of stability within the projects or coalitions and competitiveness versus the other schemes. Under some mild assumptions, we find that community energy projects can be the best strategy to follow for residential electricity customers in Scotland and Chile. Cost subsidisation can further improve community energy incentives. Moreover, after a statistical simulation, we find that community energy projects present more opportunities to be implemented in comparison with net billing schemes in both countries. We use these results to draw conclusions for the community energy sector and show that biform games can be a valuable tool to analyse increasingly complex electricity markets.

Suggested Citation

  • Fuentes González, Fabián & van der Weijde, Adriaan Hendrik & Sauma, Enzo, 2020. "The promotion of community energy projects in Chile and Scotland: An economic approach using biform games," Energy Economics, Elsevier, vol. 86(C).
    • Handle: RePEc:eee:eneeco:v:86:y:2020:i:c:s0140988320300165
    DOI: 10.1016/j.eneco.2020.104677
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    Cited by:

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    2. Zheng, Xiao-Xue & Li, Deng-Feng, 2023. "A new biform game-based investment incentive mechanism for eco-efficient innovation in supply chain," International Journal of Production Economics, Elsevier, vol. 258(C).
    3. Fuentes González, Fabián & Sauma, Enzo & van der Weijde, Adriaan Hendrik, 2022. "Community energy projects in the context of generation and transmission expansion planning," Energy Economics, Elsevier, vol. 108(C).

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    More about this item

    Keywords

    Community energy; Stochastic programming; Biform Games; Scotland; Chile;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • L52 - Industrial Organization - - Regulation and Industrial Policy - - - Industrial Policy; Sectoral Planning Methods
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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