A potential mechanism of gas supply-security cooperation based on a game-theoretic model
share
The escalating gas-supply crisis in the EU calls for immediate political and regulatory actions to improve the energy security. Currently, all member states are aiming to fill their reservoirs independently, while it is not clear how solidarity will or even could be put into practice in the future, i.e. how the accumulated reserves of one or more members may be potentially redistributed to help others in need. In this paper we aim to formalize a simple game-theoretic model in order to capture the basic features of the problem, considering the related uncertainty of the future conditions related to reservoir levels and possible transmission bottlenecks as well. We propose a mechanism for supply-security related cooperation, which is based on voluntary participation, and may contribute to the more efficient utilization of storage capacities if its principles may be later implemented. We demonstrate the operation of the proposed framework on a simple example and show that under the assumption of risk-averse participants, the concept exhibits potential.
READ FULL TEXT