Facing renewable electricity production uncertainty: Decision-making and coordination of the electricity supply chain with different risk attitudes

To meet the reliability requirements of the electricity system during the energy transition, this study investigates the renewable electricity production uncertainty of the electricity plant. By modeling the uncertainty using risk attitudes (risk aversion and risk neutrality), an electricity supply chain consisting of an electricity plant and an electricity retailer, each with different risk attitudes, is constructed. The optimal decisions of the electricity supply chain with different risk attitudes are developed, and the impacts of different risk attitudes of participants on the optimal decisions are revealed. Additionally, a profit-sharing contract-based electricity supply chain with different risk attitudes is designed. The results indicate that when all participants exhibit risk neutrality or the electricity retailer exhibits risk aversion, implementing a profit-sharing contract not only optimizes the generation mix of the electricity plant and facilitates the energy transition but also safeguards the profits of all participants and realizes coordination among participants, leading to the Pareto improvement for the electricity supply chain; when the electricity plant or all participants exhibit risk aversion, the feasibility of achieving the Pareto improvement for the electricity supply chain through a profit-sharing contract is closely linked to their risk-averse levels.