Study on Government Subsidy Decision-making of Straw Power Generation Supply Chain

Abstract

Straw power generation is a good substitute for fuel coal power generation of power plant, but the shortage of straw resources supply severely restricts the development of straw power generation industry in China. To promote the development of straw power generation, the government needs to adopt fiscal subsidies to encourage members of the supply chain. To this end, this paper studies the decision-making of government subsidy on straw power generation supply chain. First, the influencing factors of farmers-brokers-power plants straw power generation supply chain are analyzed, and the dynamic game models of the supply chain under the government incentives are built. Second, the impacts of government subsidies on three members’ decision-making are analyzed. Then, under different incentive conditions, the changes of members’ profits and chain's profits are discussed. Finally, an example is used to show the supply chain in the straw power generation, which verifies the proposed models and analysis. And several suggestions from farmers, brokers and power plants aspects are put forward to establish long-term cooperative relationship in straw power generation supply chain.