Open AccessElectricity supply chain coordination with carbon abatement technology investment under the benchmarking mechanism
Author(s) -
Wei Chen,
Yongkang Ma,
Weihao Hu
Publication year - 2022
Publication title -
journal of industrial and management optimization
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.325
H-Index - 32
eISSN - 1553-166X
pISSN - 1547-5816
DOI - 10.3934/jimo.2020175
Subject(s) - benchmarking , electricity , supply chain , investment (military) , industrial organization , mains electricity , business , revenue , environmental economics , revenue sharing , commerce , economics , natural resource economics , finance , marketing , physics , voltage , quantum mechanics , politics , political science , law , electrical engineering , engineering
The introduction of the benchmarking mechanism into the electricity industry has influenced whether utility firms choose to invest in carbon abatement technology. This study presents an electricity supply chain that includes a utility firm as the leader and a retailer as the follower to decide on the electricity price and carbon abatement technology investment. The study discusses the impact of the benchmarking mechanism on the decision-making of the electricity supply chain enterprises. The main conclusions are as follows: (1) Investing in carbon abatement technology increased electricity demand, customer surplus, and profits of the electricity supply chain enterprises. (2) Carbon abatement technology investment and profits of the supply chain enterprises increased with the unit carbon quota. (3) A revenue-sharing and cost-sharing contract could be used to coordinate the electricity supply chain.