Contract Optimization of Renewable Energy Electricity Supply Chain on the Island for Sustainability

In China, a large number of islands with power demand have not developed renewable energy, and their power supply has long been dependent on fossil fuels. In this paper, the author assumes that the supply and demand for electricity are uncertain, and consider an island electricity supply chain consisting of a single intermittent renewable plant and a single electricity sales company (ESC) and introduce Stackelberg game theory into it. In this case, the author studies how to improve the power supply efficiency and promote the development of renewable energy under the main power generation way of renewable energy, also analyzes the influence of different parameters on the decision-making of supply chain participants. Through comparative analysis, it can be found that the efficiency of supply chain and the development of renewable energy resources are significantly improved after the introduction of revenue sharing contract and revenue and risk sharing contract, and the effect of the latter contract is more obvious. Furthermore, the research shows that to maintain high levels of installed capacity in renewable energy, the efficiency of electricity generation equipment is not always the higher the better. And the research also reminds governments to take full account of the contractual environment of the electricity supply chain when subsidizing renewable energy.