Game Analysis On Feedstock Supply Chain Of Straw Power Industry In China

With depleting fossil fuel reserve and deteriorating environment, the utilization of renewable biomass energy has earned great concerns, especially in straw power market. Supporting by a series of policies, China’s straw power industry has developed rapidly since 2006. However, it’s claimed that almost 70 percent of those running straw power plants are under financial deficit, due to high cost and undersupply of feedstock, which mainly arose from inefficient supply chain management and coordination. So, this paper aims to make game analysis among China’s straw supply chain members, trying to find out the interactions among straw price, cost on straw transporting and storing, government’s incentive, straw acquisition mode, straw acquisition amount, enterprise’s profit, and some other factors. Following the results, the author attempts to propose useful advices for helping China’s straw power plants break through feedstock dilemma.Firstly, China’s straw supply chain is analyzed, recognizing the research system and game players. And straw acquisition modes are sorted as Self Acquisition Mode, Broker Acquisition Mode, and Mixed Acquisition Mode, according to different supply chain structures. Secondly, game models are constructed under various circumstances, and the optimal straw pricing strategies and equilibriums are obtained. Additionally, straw power plant’s full-load conditions are found, and effects of local government’s incentives and straw acquisition mode selections are tested. At last, the model is applied to a real case for examination and sensitivity analysis.It is found that it doesn’t matter for who get the local government’s subsidy, but how much it is. The more subsidy, the lower straw price, with more straws acquired and higher profit achieved by the straw power plant. Mixed Acquisition Mode with straw power plant’s self-acquisition ratio within [0.586, 0.635] is the most applicable straw acquisition mode for most straw power plants in China, whose installed capacities are around or over 25 MW. What’s more, a straw power plant’s equilibrium payoff declines with the increase of straw-to-electricity cost, straw storing and transporting cost, straw loss ratio, and local farmers’ reservation price of straw, and goes up with the rise of electricity converting ratio, straw electricity price, local government’s incentive, and the elasticity of local farmers’ straw selling quantity towards straw price.