A game theory approach for the construction of a green and sustainable power grid

The urgent need to combat climate change, reduce greenhouse gas emissions, and transition to renewable energy sources motivates government entities to implement regulations for power stakeholders, ensuring a greener and more affordable energy market in supply chains. Motivated by the demand to align energy supply systems with strategic government interventions, this study hypothesizes that targeted regulatory tools can effectively coordinate stakeholder behavior to accelerate green energy integration. In this regard, we examine the game-theoretic factors shaping the decisions of the government, suppliers, and retailers towards power grid implementation, emphasizing the government’s regulatory influence through four key policies: tax, subsidy, green, and research and development. Methodologically, three novel game models are introduced: a Nash game that encourages overall cooperation, the first non-cooperative game that supports a coalition between the government and suppliers against retailers, and the second non-cooperative game that promotes a coalition between the government and retailers against suppliers. Using a Canadian case study and sample data, we apply grey wolf optimization, artificial bee colony, and particle swarm optimization to estimate stakeholder equilibrium strategies towards power grid implementation. Results indicate that (1) first-game coalition; (2) minimum energy price thresholds; (3) integrated green energy planning; and (4) the stable tax policy contribute positively to the construction of a green and sustainable power grid in the region. The findings provide practical policy insights, guiding governments in the development of targeted fiscal instruments, promoting stakeholder collaboration, and ensuring regulatory frameworks are consistent with long-term energy transition objectives. • A green and sustainable power grid application is promoted under government policies. • Government considers four policies: tax, subsidy, green and R&D in the application. • Government adds green and social welfare contributions to the power grid application. • Three novel game models are proposed for stakeholder cooperation and coalition. • The application is implemented in a case study of a power supply chain in Canada.