Resilient and sustainable energy supply chains: insights on sourcing and pricing strategies in a non-collaborative and collaborative environment

Abstract

Energy supply chain resilience and sustainability are essential for dependable, ecologically responsible energy availability, reducing disruptions, and creating a sustainable future. In this regard, this study explores the resilience and sustainability of a single energy supply chain through two distinct scenarios. The focus is on a manufacturer capable of sourcing products from renewable and non-renewable power plants. Although the renewable power plant is the preferred clean option, disruptions may occur. On the other hand, the fossil fuel power plant offers reliability at the cost of environmental impact. The manufacturer employs two sourcing strategies based on disruption probabilities: single sourcing from just the renewable power plant and dual sourcing from fossil and renewable power plants. In the second scenario, a collaboration between the power plants is introduced. If a disruption occurs at the renewable power plant, it orders the fossil fuel power plant to generate electricity on its behalf. Using a game-theoretic approach, the research examines the effects of dual-sourcing techniques, and the efficacy of cooperation in minimising disruptions. It also examines the trade-offs between energy supply chain resilience and environmental sustainability. The results shed light on sourcing strategy decision-making and add to the literature on sustainable and resilient energy supply chains.