Coordination in Energy Platforms: How Fairness Concerns and Market Power Shape Pricing and Profitability

Abstract

In current energy studies, renewable energy platforms and thermal power platforms can operate under two distinct frameworks: a coordinated framework, where the renewable platform relies on the thermal platform for integrated dispatch and operational support; and a non-coordinated mode, where each platform manages generation independently and engages in competition. This paper develops a two-stage game-theoretic framework to systematically analyze pricing and profitability in a 2-by-2-by-2 scenario topology structured along three key dimensions: whether platforms are coordinated, whether consumers exhibit fairness concerns, and whether a dominant platform possesses market power. Our analysis reveals that (1) coordinated operation not only enhances system reliability but also intensifies competition, leading to lower prices and lower profits under some circumstances; (2) fairness concerns also reduce platform’s user base, optimal price and profitability; and (3) when a dominant platform leads pricing, both tend to raise prices to protect market share, whereas simultaneous pricing leads to lower prices. These findings highlight the importance of coordination, fairness, and market power in platform pricing and offer regulatory insights for the design of more resilient, sustainable, and equitable energy platform markets.