Economic research on application of electric heating system based on game theory

Abstract

The use of clean electricity to replace fossil energy burning for heating is an important emission reduction way to achieve carbon neutrality. Without a good business model, it is very difficult to promote electric heating as a replacement for coal-fired systems in some areas with abundant coal resources. This study proposed a new business model for electric heating with stakeholders that included the government, the power grid company, and heat users. Based on this model, a specific tri-objective optimization model was proposed with the electric heating promotion power, heating electricity price, and government subsidy as variables to characterize the game relationship of the stakeholders, and the components of the stakeholder benefit function were analyzed in detail. A classical multi-objective genetic algorithm was used to solve the model. Finally, an “electrical heating” project for a typical area in China was analyzed, and four promotion cases were examined. The results showed that the power grid company and users had an antagonistic relationship in relation to the electricity price, but the best solution was found for all three stakeholders due to the high financial subsidies provided by the government.