IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v282y2023ics0360544223021151.html
   My bibliography  Save this article

A game theoretic approach for time-of-use pricing with considering renewable portfolio standard effects and investment in energy storage technologies under government interventions

Author

Listed:
  • Amiri-Pebdani, Sima
  • Alinaghian, Mahdi
  • Khosroshahi, Hossein

Abstract

To remain in the competitive market, power companies, in addition to price competition, need to develop technologies to improve the reliability of electricity supply and achieve sustainable development goals. This paper explores energy pricing in an electricity supply chain consisting of renewable and conventional electricity producers and a distribution grid, focusing on improving supply reliability and achieving sustainable development goals. The study employs game theory to model government intervention in the electricity market through subsidization and Renewable Portfolio Standard (RPS) strategies. Three investment scenarios for improving reliability are considered, with producers determining wholesale prices and the distribution grid setting prices for low-and-high-load periods. The renewable producer and the distribution grid manage the reliability level by investing in energy storage technologies in the first and second scenarios, respectively, while it is ignored in the third scenario. The results reveal that optimal subsidy and RPS rates depend on the government's priorities regarding environmental effects, government revenue, and social welfare. Scenario two, is found to be the most favorable for improving supply reliability and achieving social welfare and environmental goals. Additionally, prioritizing social welfare maximization policy is found to be advantageous for producers' profit, the distribution grid, and supply reliability improvement.

Suggested Citation

  • 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).
    • Handle: RePEc:eee:energy:v:282:y:2023:i:c:s0360544223021151
    DOI: 10.1016/j.energy.2023.128721
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544223021151
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2023.128721?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. Yao, Jingyuan & Xiao, Erliang & Jian, Xianzhong & Shu, Lingli, 2021. "Service quality and the share of renewable energy in electricity generation," Utilities Policy, Elsevier, vol. 69(C).
    2. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2021. "A game theoretic approach for analyzing electric and gasoline-based vehicles’ competition in a supply chain under government sustainable strategies: A case study of South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    3. Pineda, Salvador & Bock, Andreas, 2016. "Renewable-based generation expansion under a green certificate market," Renewable Energy, Elsevier, vol. 91(C), pages 53-63.
    4. Myojo, Satoshi & Ohashi, Hiroshi, 2018. "Effects of consumer subsidies for renewable energy on industry growth and social welfare: The case of solar photovoltaic systems in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 48(C), pages 55-67.
    5. 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).
    6. Robertson Munro, Fiona & Cairney, Paul, 2020. "A systematic review of energy systems: The role of policymaking in sustainable transitions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    7. Srinivasan, Dipti & Rajgarhia, Sanjana & Radhakrishnan, Bharat Menon & Sharma, Anurag & Khincha, H.P., 2017. "Game-Theory based dynamic pricing strategies for demand side management in smart grids," Energy, Elsevier, vol. 126(C), pages 132-143.
    8. Wang, Lin & Li, Ke, 2022. "Research on renewable energy consumption and emission reduction in power market based on bi-level decision making in China," Energy, Elsevier, vol. 260(C).
    9. Russell Pittman, 2007. "Consumer Surplus as the Appropriate Standard for Antitrust Enforcement," EAG Discussions Papers 200709, Department of Justice, Antitrust Division.
    10. Sun, Peng & Nie, Pu-yan, 2015. "A comparative study of feed-in tariff and renewable portfolio standard policy in renewable energy industry," Renewable Energy, Elsevier, vol. 74(C), pages 255-262.
    11. Bento, Antonio M. & Garg, Teevrat & Kaffine, Daniel, 2018. "Emissions reductions or green booms? General equilibrium effects of a renewable portfolio standard," Journal of Environmental Economics and Management, Elsevier, vol. 90(C), pages 78-100.
    12. 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.
    13. Russ Pittman, 2007. "Consumer Surplus as the Appropriate Standard for Antitrust Enforcement," CPI Journal, Competition Policy International, vol. 3.
    14. Li, Wei & Lu, Can & Zhang, Yan-Wu, 2019. "Prospective exploration of future renewable portfolio standard schemes in China via a multi-sector CGE model," Energy Policy, Elsevier, vol. 128(C), pages 45-56.
    15. Torriti, Jacopo, 2012. "Price-based demand side management: Assessing the impacts of time-of-use tariffs on residential electricity demand and peak shifting in Northern Italy," Energy, Elsevier, vol. 44(1), pages 576-583.
    16. Adefarati, T. & Bansal, R.C., 2019. "Reliability, economic and environmental analysis of a microgrid system in the presence of renewable energy resources," Applied Energy, Elsevier, vol. 236(C), pages 1089-1114.
    17. Amiri-Pebdani, Sima & Alinaghian, Mahdi & Safarzadeh, Soroush, 2022. "Time-Of-Use pricing in an energy sustainable supply chain with government interventions: A game theory approach," Energy, Elsevier, vol. 255(C).
    18. Tang, Rui & Wang, Shengwei & Li, Hangxin, 2019. "Game theory based interactive demand side management responding to dynamic pricing in price-based demand response of smart grids," Applied Energy, Elsevier, vol. 250(C), pages 118-130.
    19. Safarzadeh, Soroush & Hafezalkotob, Ashkan & Jafari, Hamed, 2022. "Energy supply chain empowerment through tradable green and white certificates: A pathway to sustainable energy generation," Applied Energy, Elsevier, vol. 323(C).
    20. Norouzi, Nima & Fani, Maryam & Talebi, Saeed, 2022. "Green tax as a path to greener economy: A game theory approach on energy and final goods in Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 156(C).
    21. Fang, Debin & Zhao, Chaoyang & Yu, Qian, 2018. "Government regulation of renewable energy generation and transmission in China’s electricity market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 93(C), pages 775-793.
    22. Chang, Yen-Chiang & Wang, Nannan, 2017. "Legal system for the development of marine renewable energy in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 75(C), pages 192-196.
    23. 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).
    24. Xin-gang, Zhao & Ling, Wu & Ying, Zhou, 2020. "How to achieve incentive regulation under renewable portfolio standards and carbon tax policy? A China's power market perspective," Energy Policy, Elsevier, vol. 143(C).
    25. 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.
    26. Safarzadeh, Soroush & Rasti-Barzoki, Morteza & Hejazi, Seyed Reza & Piran, Md Jalil, 2020. "A game theoretic approach for the duopoly pricing of energy-efficient appliances regarding innovation protection and social welfare," Energy, Elsevier, vol. 200(C).
    27. Sun, Bo & Li, Mingzhe & Wang, Fan & Xie, Jingdong, 2023. "An incentive mechanism to promote residential renewable energy consumption in China's electricity retail market: A two-level Stackelberg game approach," Energy, Elsevier, vol. 269(C).
    28. Yaqoot, Mohammed & Diwan, Parag & Kandpal, Tara C., 2016. "Review of barriers to the dissemination of decentralized renewable energy systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 58(C), pages 477-490.
    29. Heylen, Evelyn & Deconinck, Geert & Van Hertem, Dirk, 2018. "Review and classification of reliability indicators for power systems with a high share of renewable energy sources," Renewable and Sustainable Energy Reviews, Elsevier, vol. 97(C), pages 554-568.
    30. A. Gürhan Kök & Kevin Shang & Şafak Yücel, 2018. "Impact of Electricity Pricing Policies on Renewable Energy Investments and Carbon Emissions," Management Science, INFORMS, vol. 64(1), pages 131-148, January.
    31. Safarzadeh, Soroush & Rasti-Barzoki, Morteza, 2019. "A game theoretic approach for pricing policies in a duopolistic supply chain considering energy productivity, industrial rebound effect, and government policies," Energy, Elsevier, vol. 167(C), pages 92-105.
    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. Amiri-Pebdani, Sima & Alinaghian, Mahdi & Safarzadeh, Soroush, 2022. "Time-Of-Use pricing in an energy sustainable supply chain with government interventions: A game theory approach," Energy, Elsevier, vol. 255(C).
    2. Amiri-Pebdani, Sima & Alinaghian, Mahdi & Khosroshahi, Hossein, 2023. "Pricing in competitive energy supply chains considering government interventions to support CCS under cap-and-trade regulations: A game-theoretic approach," Energy Policy, Elsevier, vol. 179(C).
    3. 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.
    4. Rasti-Barzoki, Morteza & Moon, Ilkyeong, 2021. "A game theoretic approach for analyzing electric and gasoline-based vehicles’ competition in a supply chain under government sustainable strategies: A case study of South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    5. 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).
    6. Jafari, Hamed & Safarzadeh, Soroush & Azad-Farsani, Ehsan, 2022. "Effects of governmental policies on energy-efficiency improvement of hydrogen fuel cell cars: A game-theoretic approach," Energy, Elsevier, vol. 254(PC).
    7. Teng, Minmin & Lv, Kunfeng & Han, Chuanfeng & Liu, Pihui, 2023. "Trading behavior strategy of power plants and the grid under renewable portfolio standards in China: A tripartite evolutionary game analysis," Energy, Elsevier, vol. 284(C).
    8. Fang, Debin & Zhao, Chaoyang & Kleit, Andrew N., 2019. "The impact of the under enforcement of RPS in China: An evolutionary approach," Energy Policy, Elsevier, vol. 135(C).
    9. 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).
    10. Faissal Jelti & Amine Allouhi & Mahmut Sami Büker & Rachid Saadani & Abdelmajid Jamil, 2021. "Renewable Power Generation: A Supply Chain Perspective," Sustainability, MDPI, vol. 13(3), pages 1-22, January.
    11. Fan, Jing-Li & Wang, Jia-Xing & Hu, Jia-Wei & Yang, Yang & Wang, Yu, 2021. "Will China achieve its renewable portfolio standard targets? An analysis from the perspective of supply and demand," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    12. Xu, Jie & Lv, Tao & Hou, Xiaoran & Deng, Xu & Liu, Feng, 2021. "Provincial allocation of renewable portfolio standard in China based on efficiency and fairness principles," Renewable Energy, Elsevier, vol. 179(C), pages 1233-1245.
    13. Zeng, Lijun & Du, Wenjing & Zhang, Wencheng & Zhao, Laijun & Wang, Zhaohua, 2023. "An inter-provincial cooperation model under Renewable Portfolio Standard policy," Energy, Elsevier, vol. 269(C).
    14. 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).
    15. Zhou, Dequn & Dong, Zhuojia & Sang, Xiuzhi & Wang, Qunwei & Yu, Xianyu, 2023. "Do feed-in tariff reduction and green certificate trading effectively promote regional sustainable development？," Energy, Elsevier, vol. 283(C).
    16. Zhao, Chuan & Guo, Qidong & Jia, Rongwen & Dong, Kangyin & Wang, Kun, 2023. "How does clean energy transition promote original design manufacturers? A three-party evolutionary game analysis," Energy Economics, Elsevier, vol. 126(C).
    17. Fugui Dong & Lei Shi & Xiaohui Ding & Yuan Li & Yongpeng Shi, 2019. "Study on China’s Renewable Energy Policy Reform and Improved Design of Renewable Portfolio Standard," Energies, MDPI, vol. 12(11), pages 1-23, June.
    18. Ying, Zhou & Xin-gang, Zhao & Lei, Xu, 2022. "Supply side incentive under the Renewable Portfolio Standards: A perspective of China," Renewable Energy, Elsevier, vol. 193(C), pages 505-518.
    19. Song, Xiao-hua & Han, Jing-jing & Zhang, Lu & Zhao, Cai-ping & Wang, Peng & Liu, Xiao-yan & Li, Qiao-chu, 2021. "Impacts of renewable portfolio standards on multi-market coupling trading of renewable energy in China: A scenario-based system dynamics model," Energy Policy, Elsevier, vol. 159(C).
    20. Xin-gang, Zhao & Lei, Xu & Ying, Zhou, 2022. "How to promote the effective implementation of China’s Renewable Portfolio Standards considering non-neutral technology?," Energy, Elsevier, vol. 238(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:energy:v:282:y:2023:i:c:s0360544223021151. 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.