ORIGINAL RESEARCH article
Front. Sustain.
Sec. Sustainable Supply Chain Management
This article is part of the Research TopicMathematical Optimization for Decision Support Systems: Practices and Strategies for Sustainable Supply Chain ManagementView all 6 articles
Optimizing Bidding Strategies in Hybrid Power Supply Chains under Price Subsidies and Renewable Portfolio Standards
Provisionally accepted
- 1State Grid Shanghai South Power Supply Company, Shanghai, China
- 2Key Laboratory of Control of Power Transmission and Conversion of the Ministry of Education, Shanghai Jiao Tong University, Shanghai, China
Select one of your emails
You have multiple emails registered with Frontiers:
Notify me on publication
Please enter your email address:
If you already have an account, please login
You don't have a Frontiers account ? You can register here
As renewable energy generation enters a new phase of development, government policies have shifted from a single subsidy to a combination of subsidies for renewable energy consumption and renewable portfolio standards (RPS). The effectiveness of these new policies requires further exploration. This study establishes a "many-to-one" electricity supply chain model under the dual policy framework of renewable energy consumption subsidies and RPS policies, involving competitive renewable energy generators, fossil-fueled generators, and electricity retailers. The model considers the randomness of renewable energy generation and the uncertainty of market demand, with equilibrium decisions derived using a single-period sequential Stackelberg game under different bidding sequences. The study finds that as the government increases the subsidy for the per-unit consumption of renewable energy, the wholesale prices of both renewable and fossil-fueled electricity decrease. The increased subsidy boosts electricity retailers' procurement of renewable electricity while reducing their procurement of fossil-fueled electricity. Additionally, the subsidy reduces the profits of fossil-fueled generators. An increase in Renewable Portfolio Standards (RPS) leads to a decline in the wholesale prices of both renewable and fossil-fueled electricity. Contrary to intuition, increasing RPS reduces both renewable and fossil-fueled electricity procurement by electricity retailers, and decreases profits for all supply chain participants. Interestingly, as competition in the renewable and fossil-fueled electricity markets intensifies, when generators adopt a bidding-prioritized strategy, electricity retailers' procurement of electricity from these generators decreases.
Keywords: Bidding-prioritized strategy, Electricitysupply chain, Renewable energy subsidies, Renewable Portfolio Standards (RPS), Stackelberg game theory
Received: 21 Sep 2025; Accepted: 26 Jan 2026.
Copyright: © 2026 Duan, Deng, Lu, Chen and MODUO. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
* Correspondence: Chao Lu
Disclaimer: All claims expressed in this article are solely those of the authors and do not necessarily represent those of their affiliated organizations, or those of the publisher, the editors and the reviewers. Any product that may be evaluated in this article or claim that may be made by its manufacturer is not guaranteed or endorsed by the publisher.