Investment strategy for renewable energy and electricity service quality under different power structures

Abstract

<p style='text-indent:20px;'>This paper investigates and develops an electricity supply chain with an electricity generator and electricity retailer. The electricity generator invests in renewable energy and sells the electricity to the electricity retailer; the retailer then sells the electricity to consumers according to electricity service quality. Three models are considered: the vertical Nash game, the electricity-generator Stackelberg model, and the electricity-retailer Stackelberg model. Finally, the optimal solutions under different power-structure models are compared. Certain conclusions can be drawn from the findings: (1) the highest electricity service quality and renewable energy investment are obtained in the vertical Nash game model, the electricity generator obtains more profits in the electricity-generator Stackelberg model, and the electricity retailer obtains more profits in the electricity-retailer Stackelberg model. (2) The investment in renewable energy in the electricity-generator Stackelberg model is less than that in the electricity-retailer Stackelberg model, and the investment in electricity service quality in the electricity-retailer Stackelberg model is less than that in the electricity-generator Stackelberg model (under certain conditions). (3) Both increasing the electricity service quality sensitivity and renewable energy sensitivity could increase the optimal electricity price, electricity demand, electricity service quality, renewable energy investment, and supply-chain enterprises' profit.</p>

External financing, channel power structure and product green R&D decisions in supply chains

“…Naturally, higher product green R&D leads to higher profit for the downstream firm by increasing consumer demand. This is consistent with the observation in the existing literature that a higher channel power is generally indicative of a higher profit (Ghosh and Shah, 2015; Chen et al ., 2023; Fan et al ., 2020). The numerical result in Figure 3 also demonstrated it.…”

“…Similar assumptions can be seen in studies by Fan et al. (2017, 2023), Chen et al . (2023) and Hong et al .…”

“…(2020) investigated the impact of cost-sharing on the manufacturer's green R&D decisions in the manufacturer-led and retailer-led Stackelberg models, finding that as cost-sharing increases, the manufacturer does not change its green R&D decision in the manufacturer-led Stackelberg model but increases the green R&D level in the retailer-led Stackelberg model. Chen et al . (2023) investigated the effect of channel power structures on green energy R&D strategies in the electricity supply chain with an electricity generator and an electricity retailer and reported that the Nash game model has the greatest degree of green R&D. This research differs from the aforementioned studies in three ways.…”

“…This type of green R&D investment cost function has been very commonly used in the literature on supply chain management, such as in studies by Fan et al . (2020), Chen et al . (2023) and Hong et al .…”

ASEAN’s energy transition: how to attract more investment in renewable energy

“…Micro-level (regional, district) governance barriers are beyond the scope of the present study. Second, we recognize that different types of renewable energy require different investment strategies (Boomsma et al 2012;Cicea et al 2014;Chen et al 2022). In our study, however, we do not distinguish between investment in different types of renewable energy, and examine renewable energy investment flows in ASEAN at the aggregate level.…”