Risk assessment of renewable energy investments: A modified failure mode and effect analysis based on prospect theory and intuitionistic fuzzy AHP

By Esra Ilbahar, C. Kahraman, S. Çebi. Energy, 2022

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Abstract Most countries intending to replace traditional energy sources with renewable energy sources have started to make major investments in this field. Since renewable energy is a sector requiring large amount of investment costs, evaluation of investment risks are extremely important to make the best investment decisions. However, as risk assessment is a process based on expert judgments, the indecisiveness and cognitive bias of the experts should be eliminated. Therefore, a modified Failure Mode and Effect Analysis (FMEA) based on the prospect theory and interval-valued intuitionistic fuzzy Analytic Hierarchy Process (AHP) is introduced to assess the risks in renewable energy investments for the first time. As a result of the proposed risk assessment approach, renewable energy investment risks are prioritized by effectively overcoming the indecisiveness and cognitive bias of experts.

Subfields: Artificial Intelligence, Management Science and Operations Research, Statistics and Probability

View Paper: https://www.semanticscholar.org/paper/fbd2f2cadf6262ab4722ccfa59d566f406ce2bea