Government subsidy provision in biomass energy supply chains

ABSTRACT

This paper investigates the government’s optimal subsidy provision strategy for a biomass energy supply chain that consists of the power plant, the villagers’ committee and farmer. We examine three possible subsidy provision strategies depending on which party (the power plant, the villagers’ committee or the farmer) the government chooses to subsidise, and compare how it can influence the government’s target by assuming that the subsidy price is exogenously given. We also extend our findings when the government can endogenously determine the subsidy price. Moreover, our analyses reveal the optimal stakeholder selection strategy for each party to maximise its payoff.

KEYWORDS:

• Biomass energy
• supply chain
• provision strategy
• stackelberg game
• government subsidy

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Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This work was supported by the National Natural Science Foundation of China [71971052, 71671033, 71371190];Fund for Innovative Research Groups of the National Natural Science Foundation of China [71621061];111 Project [B16009];Fundamental Research Funds for the Central Universities [N160601001]; Project of Promoting Talents in Liaoning Province [XLYC1807252].