Thermal power emission reduction behavior considering dynamic cost: contract cooperation in stochastic evolutionary game

Pingkuo Liu, Qianhui Sun and Yingjie Zhang

Energy, 2025, vol. 333, issue C

Abstract: The conflict between low emission constraints and high abatement costs highlights the challenge of carbon neutrality in the thermal power sector. In order to avoid vicious competition and responsibility shifting, it is proposed to introduce contractual cooperation between thermal power and electric power retailers, through the introduction of Geometric Brownian Motion to simulate the impact of dynamic cost on each subject, and the use of Gaussian White Noise random interference term to simulate the impact of unpredictable factors on the game process, to study the strategic behavior of thermal power and electric power retailers under the dual impact of dynamic cost and random interference. The results show that: (1) the increase of thermal power generation cost has an incentive effect on the carbon emission reduction behavior of thermal power enterprises, and the increase of carbon emission cost has a significant incentive effect on the participation of electricity retailers in contractual cooperation. (2) Thermal power enterprises will take the initiative to reduce emissions only if the apportionment coefficient is moderate, as the revenue sharing coefficient gets larger, the carbon emission reduction of thermal power enterprises is more affected by cost fluctuations, and the participation of electric power retailers in contractual cooperation is less affected by cost fluctuations, and the increase of the price discount coefficient will be beneficial to incentivize carbon emission reduction of thermal power enterprises, as well as the participation of electric power retailers in contractual cooperation. (3) Carbon abatement costs and additional benefits only affect thermal power enterprises' carbon abatement behavior, while the contractual cooperation behavior of electricity retailers is not affected by them.

Keywords: Dynamic costs; Emission reduction strategies; Contractual cooperation; Stochastic evolutionary game (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:333:y:2025:i:c:s0360544225030531

DOI: 10.1016/j.energy.2025.137411

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