Multiperiod optimal planning of biofuel refueling stations: A bi-level game-theoretic approach

Abstract

Energy suppliers pay more and more attention to bioenergy which has great potential for responding to extreme climate challenges. Nevertheless, few studies concentrate on the optimal planning of the downstream bioenergy supply chain. This study proposes a multiperiod bilevel game-theoretic framework for the optimal planning of biofuel refueling stations, including an upper-level model for petroleum companies and a lower-level model for biofuel companies. Based on the characteristic of the game theory and the implementation of carbon taxes, four scenarios are established. Finally, the proposed method is validated by a real-world case in Beijing, China. Under the upper limit of the blending ratio, the results show that cooperation can achieve the biggest overall profit. Petroleum companies are more profitable for cooperating with biofuel companies no matter whether carbon tax exists or not. Biofuel companies can get more profit if they non-cooperate with petroleum companies when there is no carbon tax, but the existence of the carbon tax makes it more profitable for biofuel companies to cooperate with petroleum companies. Besides, the best choice for biofuel companies to enter the fuel retailing market is the early stage of energy transition when no carbon tax exists or carbon tax is low.