Strategic Decision-Making in Duopolistic Energy and Water Markets: Examining Competition versus Cooperation for Farm Siting Optimization

The purpose of this paper is to delve into the intricate dynamics of duopolistic energy and water markets, wherein the main players are represented by a set of energy technologies inclusive of combined-cycle gas turbines power plants competing with photovoltaics plants. Considering the water sector, competition is happening amongst desalination plants and wastewater treatment plants. Both sectors are feeding an agricultural farm producing a diversified food basket. The first stage of the proposed framework aims to investigate the complex interactions between technologies by means of game theoretic models that simulate scenarios of both competition and cooperation amongst energy technologies and water technologies. Insights are unveiled on how these strategies impact the minimum profitable supply of each technology. This information is then integrated in the second stage of the study where a multi-objective optimisation framework is formulated to determine the optimal farm sites based on soil quality indicators and supply data. The optimisation results are represented by suitability maps that offer a comprehensive view of the interplay between resource supply, environmental conditions, and technology dynamics, aiding in the identification of optimal locations for agricultural farms. By combining economic and environmental considerations, this research paves the way for more sustainable farming practices. Ultimately, this study contributes to a deeper understanding of the strategic decision-making process in duopolistic energy and water markets. It offers a framework for stakeholders to navigate the complexities of these markets, leading to more efficient decisions with regards to farm siting and resource allocation.