Regional electricity cooperation model for cost-effective electricity management with an emphasis on economic efficiency

• Published in: Energy policy 2024-12, Vol.195, p.114383, Article 114383
• Main Authors: Wang, Yubao, Zhen, Junjie
• Format: Article
• Language: English
• Subjects: China; Cooperative game; cost effectiveness; Distribution of benefits; electricity; electricity costs; energy policy; pollution; power generation; Regional cooperation optimization model; Shapley value; sustainable development; viability
• ISSN: 0301-4215
• DOI: 10.1016/j.enpol.2024.114383

Effectively reducing the total electricity cost while ensuring its overall efficiency is vital for the sustainable development of power systems. Herein, we develop a regional cooperation optimization model to enhance the existing power cost model. This is achieved by incorporating power trading scenarios and pollution considerations, leveraging the distinct characteristics of power generation costs from various sources. The developed regional cooperation optimization model simultaneously accounts for production efficiency and overall power costs, ensuring equitable distribution and compensation of benefits among cooperating entities. In addition, the key findings indicate that the interregional cooperation optimization model significantly reduces the total cost of electricity operations in China. Specifically, during the 11th five-year plan period, the total electricity cost in China exhibited a noteworthy decline of USD 50,876 million owing to multi-objective cooperative optimization, constituting 25.99% of the total electricity cost compared with the preoptimization period. This study identifies the eastern and western regions as principal contributors to the cost savings achieved by the interregional cooperative optimization model. Simultaneously, recognizing their significant contributions, it is recommended that the eastern and western regions provide additional cost compensation to other regions to ensure the long-term viability of the cooperative alliance. •Developed a cooperative optimization model that considers both productivity and overall power cost.•Equitable distribution of benefits and compensation to be considered in regional electricity cooperation.•The cross-regional cooperation optimization model significantly reduces the total cost of power operations in China.•The eastern and western regions of China are the main contributors to the cost savings of the electricity cooperative model.