Contract Selection Decision of Hybrid Energy Power Supply Chain Under Cap-and-Trade : Perspective of Supply Disruption Risk

The intermittency of new energy power generation (NEPG) exposes the power supply chain (PSC) to a higher supply disruption risk (SDR), so it is crucial to determine how to manage such risk and minimize losses. In the context of cap-and-trade (CAT) in the power industry, this paper constructs a two-stage decentralized PSC considering the SDR, which is composed of a hybrid energy generator and a power retailer. By establishing a Stackelberg game model under the power option contract (POC) and the power purchase commitment contract (PPCC), we obtain the optimal equilibrium decisions and the corresponding optimal expected profits under the two contracts to further explore the optimal contract selection decision of the power retailer based on the SDR when the regulations of the CAT change. We mainly find the following: (1) When the SDR is below a certain threshold, the power retailer always prefers the PPCC. When the SDR exceeds this threshold, the contract selection decision varies depending on changes in the regulations of the CAT. (2) In general, the increase in option fee will make the power retailer prefer the PPCC, but when the option fee exceeds a certain threshold and the carbon allowances are less than a certain threshold at the same time, the increase in option fee will instead make the power retailer prefer the POC when the SDR is higher. Our results provide insights for power firms and governments