Biomass Supply Chain Coordination For Remote Communities: A Game-Theoretic Modeling And Analysis Approach

Biomass, as one of the most available renewable energies, could reduce dependency on fossil fuels and the consequent environmental impacts. There is a need for biomass supply chain management, which is managing bioenergy production from harvesting feedstock to energy conversion facilities. In case of remote communities, bioenergy adoption requires dealing with dispersed geographies of suppliers and places of consumption with small scales of energy demand. As such, coordination plays a key role in increasing the efficiency of the biomass supply chain network through bundling of demand and thus improving the economy of scale. This paper employs a game-theoretic approach to formulate a coordinated biomass supply chain with three echelons including suppliers, hubs, and energy convertors. To investigate the strategic interactions of participants, three decision making structure scenarios have been considered under Stackelberg game providing insights into the impact of power distribution, the role of side payments in enforcing the flow of decisions, and the resulting efficiency and performance improvements. In doing so, a case study bioenergy supply chain for three northern Canadian communities is explored to demonstrate the application of the proposed formulation, solution methods, and the practicality and significance of the adopted approach and outcomes for remote communities.