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The promotion of community energy projects in Chile and Scotland: An economic approach using biform games

Fabián Fuentes González, Adriaan van der Weijde and Enzo Sauma

Energy Economics, 2020, vol. 86, issue C

Abstract: We model simple and novel three-player bi-form coalitional games to analyse community energy projects in Chile and Scotland. We take into account two methods based on biform games, which deal with games with a non-empty Core and an empty Core, respectively, and construct models based on real-world data on community energy projects, net billing (or distributed generation) schemes, and ordinary utility contracts. We then use these to derive insights about the economic-strategic viability of community energy projects, in the sense of stability within the projects or coalitions and competitiveness versus the other schemes. Under some mild assumptions, we find that community energy projects can be the best strategy to follow for residential electricity customers in Scotland and Chile. Cost subsidisation can further improve community energy incentives. Moreover, after a statistical simulation, we find that community energy projects present more opportunities to be implemented in comparison with net billing schemes in both countries. We use these results to draw conclusions for the community energy sector and show that biform games can be a valuable tool to analyse increasingly complex electricity markets.

Keywords: Community energy; Stochastic programming; Biform Games; Scotland; Chile (search for similar items in EconPapers)
JEL-codes: C61 C71 C72 L52 L97 Q48 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:86:y:2020:i:c:s0140988320300165

DOI: 10.1016/j.eneco.2020.104677

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Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant

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