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Article
Publication date: 28 May 2021

Zhenning Zhu, Lingcheng Kong, Gulizhaer Aisaiti, Mingzhen Song and Zefeng Mi

In the hybrid electricity market consisting of renewable and conventional energy, the generation output of renewable power is uncertain because of its intermittency, and the power…

Abstract

Purpose

In the hybrid electricity market consisting of renewable and conventional energy, the generation output of renewable power is uncertain because of its intermittency, and the power market demand is also fluctuant. Meanwhile, there is fierce competition among power producers in the power supply market and retailers in the demand market after deregulation, which increases the difficulty of renewable energy power grid-connection. To promote grid-connection of renewable energy power in the hybrid electricity market, the authors construct different contract decision-making models in the “many-to-many” hybrid power supply chain to explore the pricing strategy of renewable energy power grid-connecting.

Design/methodology/approach

Considering the dual-uncertainty of renewable energy power output and electricity market demand, the authors construct different decision-making models of wholesale price contract and revenue-sharing contract to compare and optimize grid-connecting pricing, respectively, to maximize the profits of different participants in the hybrid power supply chain. Besides, the authors set different parameters in the models to explore the influence of competition intensity, government subsidies, etc. on power pricing. Then, a numerical simulation is carried out, they verify the existence of the equilibrium solutions satisfying the supply chain coordination, compare the differences of pricing contracts and further analyze the variation characteristics of optimal contract parameters and their interaction relations.

Findings

Revenue-sharing contract can increase the quantity of green power grid-connection and realize benefits Pareto improvement of all parties in hybrid power supply chain. The competition intensity both of power supply and demand market will have an impact on the sharing ratio, and the increase of competition intensity results in a reduction of power supply chain coordination pressure. The power contract price, spot price and selling price have all been reduced with the increase of the sharing ratio, and the price of renewable power is more sensitive to the ratio change. The sharing ratio shows a downward trend with the increase of government green power subsidies.

Originality/value

On the basis of expanding the definition of hybrid power market and the theory of newsvendor model, considering the dual-uncertainty of green power generation output and electricity market demand, this paper builds and compares different contract decision-making models to study the grid-connection pricing strategy of renewable energy power. And as an extension of supply chain structure types and management, the authors build a “many-to-many” power supply chain structure model and analyze the impact of competition intensity among power enterprises and the government subsidy on the power grid-connecting pricing.

Details

Industrial Management & Data Systems, vol. 121 no. 7
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 12 September 2023

Mingzhen Song, Lingcheng Kong and Jiaping Xie

Rapidly increasing the proportion of installed wind power capacity with zero carbon emission characteristics will help adjust the energy structure and support the realization of…

Abstract

Purpose

Rapidly increasing the proportion of installed wind power capacity with zero carbon emission characteristics will help adjust the energy structure and support the realization of carbon neutrality targets. The intermittency of wind resources and fluctuations in electricity demand has exacerbated the contradiction between power supply and demand. The time-of-use pricing and supply-side allocation of energy storage power stations will help “peak shaving and valley filling” and reduce the gap between power supply and demand. To this end, this paper constructs a decision-making model for the capacity investment of energy storage power stations under time-of-use pricing, which is intended to provide a reference for scientific decision-making on electricity prices and energy storage power station capacity.

Design/methodology/approach

Based on the research framework of time-of-use pricing, this paper constructs a profit-maximizing electricity price and capacity investment decision model of energy storage power station for flat pricing and time-of-use pricing respectively. In the process, this study considers the dual uncertain scenarios of intermittency of wind resources and random fluctuations in power demand.

Findings

(1) Investment in energy storage power stations is the optimal decision. Time-of-use pricing will reduce the optimal capacity of the energy storage power station. (2) The optimal capacity of the energy storage power station and optimal electricity price are related to factors such as the intermittency of wind resources, the unit investment cost, the price sensitivities of the demand, the proportion of time-of-use pricing and the thermal power price. (3) The carbon emission level is affected by the intermittency of wind resources, price sensitivities of the demand and the proportion of time-of-use pricing. Incentive policies can always reduce carbon emission levels.

Originality/value

This paper creatively introduced the research framework of time-of-use pricing into the capacity decision-making of energy storage power stations, and considering the influence of wind power intermittentness and power demand fluctuations, constructed the capacity investment decision model of energy storage power stations under different pricing methods, and compared the impact of pricing methods on optimal energy storage power station capacity and carbon emissions.

Highlights

  1. Electricity pricing and capacity of energy storage power stations in an uncertain electricity market.

  2. Investment strategy of energy storage power stations on the supply side of wind power generators.

  3. Impact of pricing method on the investment decisions of energy storage power stations.

  4. Impact of pricing method, energy storage investment and incentive policies on carbon emissions.

  5. A two-stage wind power supply chain including energy storage power stations.

Electricity pricing and capacity of energy storage power stations in an uncertain electricity market.

Investment strategy of energy storage power stations on the supply side of wind power generators.

Impact of pricing method on the investment decisions of energy storage power stations.

Impact of pricing method, energy storage investment and incentive policies on carbon emissions.

A two-stage wind power supply chain including energy storage power stations.

Details

Industrial Management & Data Systems, vol. 123 no. 11
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 30 October 2019

Zhenning Zhu, Lingcheng Kong, Jiaping Xie, Jing Li and Bing Cao

In the hybrid electricity market, renewable energy power generator faces the uncertainty of power market demand and the randomness of the renewable energy generation output. In…

Abstract

Purpose

In the hybrid electricity market, renewable energy power generator faces the uncertainty of power market demand and the randomness of the renewable energy generation output. In order to improve the grid-connected quantity of green power, the purpose of this paper is to design the pricing mechanism for renewable energy power generator with revenue-sharing contract in a two-stage “multi-single” electricity supply chain which contains a single dominant power retailer and two kinds of power suppliers providing different power energy species.

Design/methodology/approach

Considering the dual uncertainties of renewable energy power output and power market demand, the authors design the full-cooperative contract decision-making model, wholesale price contract decision-making model and revenue-sharing contract decision-making model to compare and optimize grid-connected pricing in order to maximize profit of different parties in power supply chain. Then, this paper performs a numerical simulation, discusses the existence of the equilibrium analytical solutions to satisfy the supply chain coordination conditions and analyzes the optimal contract parameters’ variation characteristics and their interaction relationship.

Findings

The authors find that the expected profits of the parties in the hybrid power supply chain are concave about their decision variables in each decision-making mode. The revenue-sharing contract can realize the Pareto improvement for all parties’ interest of the supply chain, and promote the grid-connected quantity of green power effectively. The grid-connected price will reduce with the increase of revenue-sharing ratio, and this impact will be greater on the renewable energy power. The greater the competition intensity in power supply side, the smaller the revenue-sharing ratio from power purchaser. And for the same rangeability of competition intensity, the revenue-sharing ratio reduction of thermal power is less than that of the green power. The more the government subsidizing green power supplier, the smaller the retailer sharing revenue to it.

Practical implications

Facing with the dual uncertainties of green power output and market demand and the competition of thermal power in hybrid electricity market, this study can provide a path to solve the problem of renewable energy power grid-connecting. The results can help green power become competitive in hybrid power market under loose regulations. And this paper suggests that the government subsidy policy should be more tactical in order to implement a revenue-sharing contract of the power supply chain.

Originality/value

This paper studies the renewable energy electricity grid-connected pricing under the uncertainty of power supply and market demand, and compares different contract decision-making strategies in order to achieve the power supply chain coordination. The paper also analyzes the competition between thermal power and renewable energy power in hybrid electricity market.

Details

Industrial Management & Data Systems, vol. 119 no. 9
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 11 September 2017

Lingcheng Kong, Zhiyang Liu, Yafei Pan, Jiaping Xie and Guang Yang

The online direct selling mode has been widely accepted by enterprises in the O2O era. However, the dual-channel (online/offline, forward/backward) operations of the closed-loop…

1503

Abstract

Purpose

The online direct selling mode has been widely accepted by enterprises in the O2O era. However, the dual-channel (online/offline, forward/backward) operations of the closed-loop supply chain (CLSC) changed the relationship between manufacturers and retailers, thus resulting in channel conflict. The purpose of this paper is to take a dual-channel operations of CLSC as the research target, where a manufacturer sells a single product through a direct e-channel as well as a conventional retail channel; the retailer are responsible for collecting used products in the reverse supply chain and the manufacturer are responsible for remanufacturing.

Design/methodology/approach

The authors build a benchmark model of dual-channel price and service competition and take the return rate, which is considered to be related to the service level of the retailer, as the function of the service level to extend the model in the reverse SC. The authors then analyze the optimal pricing and service decision under centralization and decentralization, respectively. Finally, with the revenue-sharing factor, wholesale price and recycling price transfer payment coefficient as contract parameters, the paper also designs a revenue-sharing contract led by the manufacturer and explores in what situation the contract could realize the Pareto optimization of all players.

Findings

In the baseline model, the results show that optimal price and service level correlate positively in centralization; however, the relation relies on consumers’ price sensitivity in decentralization. In the extension model, the relationship between price and service level also relies on the relative value of increased service cost and remanufacturing saved cost. When the return rate correlates with the service level, a recycling transfer payment can elevate the service level and thus raise the return rate. Through analyzing the parameters in revenue-sharing contract, a point can be reached where lowering the wholesale price and raising the transfer payment coefficient will promote retailers to share revenue.

Practical implications

Many enterprises establish the dual-channel distribution system both online and offline, which need to understand how to resolve their channel conflict. The conflict is especially strong in CLSC with remanufacturing. The result helps the node enterprises realize the coordination of the dual-channel CLSC.

Originality/value

It takes into account the fact that there are two complementary relationships, such as online selling and offline delivery; used product recycling and remanufacturing. The authors optimize the strategy of product pricing and service level in order to solve channel conflict and double marginalization in the closed-loop dual-channel distribution network.

Details

Industrial Management & Data Systems, vol. 117 no. 8
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 26 October 2018

Lingcheng Kong, Ling Liang, Jianhong Xu, Weisi Zhang and Weijun Zhu

Although the wind power industry has been booming in China during the last decade, the development of wind turbine aftermarket service is still lagging behind, which seriously…

Abstract

Purpose

Although the wind power industry has been booming in China during the last decade, the development of wind turbine aftermarket service is still lagging behind, which seriously affects the operational efficiency of wind farms. If wind turbine manufacturers get involved in the aftermarket, the service pricing policy will impact the profits of both the manufacturer and the wind farm. Therefore, it is necessary to discuss an optimal service pricing strategy in the wind turbine aftermarket and design a method to improve electricity generation efficiency through service contract design. The paper aims to discuss these issues.

Design/methodology/approach

In order to decide the maintenance quantity and channel effort level, the authors design a normal Stackelberg game and an efficiency value-added revenue-sharing contract and discuss two kinds of revenue increment sharing models under situations, in which the supply chain’s leaders are the wind farm and the wind turbine manufacturer, respectively.

Findings

The results show that in either case, there exist optimal power generation revenue-sharing ratios that can maximize profit. At the same time, the authors outline an optimal service pricing policy, maintenance demand policy and channel service effort-level policy. The results summarize the influences of wind aftermarket services on wind farms’ and wind turbine manufacturers’ profit, which provides managerial insights into the process of manufacturing servitization.

Practical implications

The manufacturer’s channel effort level will influence the power generation increments very much, so the authors have developed a mechanism to stimulate the manufacturer improving the efficiency of aftermarket services.

Originality/value

Taking the power generation increment revenue as the profit increment function, the authors discuss the influence of service price on the profit increment of the wind farm and the wind turbine manufacturer and also consider the influence of service price on the wind farms maintenance quantity and wind turbine manufacturers channel effort level.

Details

Industrial Management & Data Systems, vol. 119 no. 3
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 5 May 2022

Jiayuan Han, Lingcheng Kong, Wenbin Wang and Jiqing Xie

A public emission reduction project offers saleable carbon credits to encourage individual residents to participate in activities with low carbon emissions: if the residents…

Abstract

Purpose

A public emission reduction project offers saleable carbon credits to encourage individual residents to participate in activities with low carbon emissions: if the residents participate, they will earn carbon credits that can be sold to polluting firms for carbon offsetting. This study explores the economic and environmental implications of these projects.

Design/methodology/approach

The authors develop a multiperiod model to incorporate the decisions of individual residents and a polluting firm. The model captures residents' difference in estimating the price of carbon credits: A proportion of residents are naive residents who shortsightedly take the previous market price of carbon credits as the basis of their decision-making.

Findings

A public emission reduction project can improve the cost-efficiency of carbon reduction, increase both the profit of the polluting firm and consumer surplus, but may hurt the welfare of the participating residents. Reducing transaction costs of carbon credits may cause a greater loss to participating residents. As the ratio of naive residents decreases, the overall welfare of participating residents increases and the number of participating residents decreases.

Practical implications

To encourage more residents to reduce carbon emissions, the project should be promoted to new areas (e.g. rural areas) where there are more naive residents. Although reducing transaction costs is an effective way to increase the economic viability of the project, the government should pay attention to protecting the welfare of residents, and educating residents is an effective way to improve their overall welfare.

Originality/value

This paper is the first to reveal the economic and environmental implications of public emission reduction projects.

Details

Industrial Management & Data Systems, vol. 122 no. 5
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 10 July 2017

Lingcheng Kong, Zhong Li, Ling Liang and Jiaping Xie

When the power generator faces uncertain and independent electricity spot price and renewable energy source supply, two different conditions need to be considered: the…

477

Abstract

Purpose

When the power generator faces uncertain and independent electricity spot price and renewable energy source supply, two different conditions need to be considered: the distributions of renewable energy source electricity and electricity spot price are independent or dependent. The purpose of this paper is to explore the capacity investment strategy under volatile electricity spot price when renewable energy penetration rate is low, taking into account these two conditions.

Design/methodology/approach

The authors design a capacity investment model under dual uncertainties and consider how to optimize the investment capacity in order to maximize profit under two different conditions.

Findings

The authors find that when renewable energy supply fluctuation is unrelated to spot electricity price fluctuation, the renewable energy power profitability is determined by the average cost of spot electricity price and equivalent cost. When renewable energy supply fluctuation is related to spot electricity price fluctuation, the renewable energy power profitability is determined by the market value and the construction and maintenance cost.

Practical implications

Faced with the conflict of the renewable energy supply, the authors need to understand how to plan the generation capacity with intermittent renewable sources. The result helps renewable energy become competitive in the electricity market under loose regulations.

Originality/value

The authors compare two capacity investment strategies that the renewable energy supply fluctuation is related and unrelated to spot electricity price.

Details

Industrial Management & Data Systems, vol. 117 no. 6
Type: Research Article
ISSN: 0263-5577

Keywords

Article
Publication date: 25 July 2023

Shuliang Zhao and Qi Fan

It has been ten years since the policy was implemented, but the effect of the policy needs to be tested empirically. This paper aims to explore the mechanism of policy influence…

65

Abstract

Purpose

It has been ten years since the policy was implemented, but the effect of the policy needs to be tested empirically. This paper aims to explore the mechanism of policy influence on regional innovation ability by measuring the effectiveness of policy by innovation ability indicators. Further, it reflects the problems in the process of the transformation and development of resource-based cities in recent years and points out the direction for the development of the cities in the future. In addition, this paper discusses the differences between regions and cities in China and seeks the path to narrow the gap.

Design/methodology/approach

This paper mainly uses the difference-in-difference method for the research. This study divided China’s resource-based cities and non-resource-based cities into experimental groups and control groups, and explored the effect of the transformation and development of resource-based cities and the changes of their innovation ability under the influence of the National Sustainable Development Plan for Resource-based Cities (NSDPRC). More carefully, this paper uses the fixed effects regression model, propensity score matching method, bootstrap method and other methods to improve the empirical results.

Findings

This paper finds that NSDPRC significantly improves the innovation ability of resource-based cities, although there is some lag in this effect. Research on the influence mechanism of policies shows that NSDPRC improves the marketization degree of resource-based cities and reduces the proportion of the secondary industry in such cities. Finally, the results of the heterogeneity analysis confirm that policies are more popular in western China and that resource-based cities in growth, maturity and decline are more vulnerable to policy influence. The development of policy effectiveness also requires the size of a city, and maintaining a healthy and reasonable scale is necessary for urban development.

Originality/value

First, the existing research on the development of resource-based cities is mainly from the perspective of economy and environment, but rarely from the perspective of innovation ability, and the index to measure urban development is relatively single. This paper will compensate for this deficiency. Second, different from the European and American countries that have basically completed the industrial transformation, the research on Chinese cities will provide a reference for the transformation of developing countries. Finally, from the perspective of resource endowment theory and innovation theory, this paper discusses the influence of SDPNRBC mechanism on the innovation ability improvement of resource-based cities, and further improves and enriches the theory.

Details

Journal of Science and Technology Policy Management, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2053-4620

Keywords

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