Biomass supply contract pricing and environmental policy analysis: A simulation approach

Shiyang Huang and Guiping Hu

Energy, 2018, vol. 145, issue C, 557-566

Abstract: This paper proposes an agent-based simulation model to study the biomass supply contract pricing and policy making in the biofuel industry. In the proposed model, the agents include farmers and a biofuel producer. Farmers' decision-making is assumed to be profit driven, which is formulated as a mixed-integer optimization model, and the biofuel producer's pricing decision is represented with a linear equation with an objective to maximize profits. A case study based on Iowa has been developed to analyze the interactions between the stakeholders and assist determination of the optimal pricing equation for the biofuel producer. Simulation results show that under such a pricing strategy, the biofuel producer can achieve higher profitability than using a fixed price. The impact of government environmental regulations on farmers' decision-making and biomass supply has also been analyzed, and managerial insights have been derived.

Keywords: Corn; Switchgrass; Optimization; Linear pricing equation; Agent-based simulation; Soil erosion tolerance (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S036054421830015X
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:145:y:2018:i:c:p:557-566

DOI: 10.1016/j.energy.2018.01.015

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().