IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v10y2017i12p2089-d122264.html
   My bibliography  Save this article

Economic Feasibility Analysis for Renewable Energy Project Using an Integrated TFN–AHP–DEA Approach on the Basis of Consumer Utility

Author

Listed:
  • Lu Gan

    (College of Architecture and Urban-Rural Planning, Sichuan Agricultural University, Dujiangyan 611830, China)

  • Dirong Xu

    (College of Architecture and Urban-Rural Planning, Sichuan Agricultural University, Dujiangyan 611830, China)

  • Lin Hu

    (College of Architecture and Urban-Rural Planning, Sichuan Agricultural University, Dujiangyan 611830, China)

  • Lei Wang

    (College of Architecture and Urban-Rural Planning, Sichuan Agricultural University, Dujiangyan 611830, China)

Abstract

A renewable energy (RE) project has been brought into focus in recent years. Although there is quite a lot of research to assist investors in assessing the economic feasibility of the project, because of the lack of consideration of consumer utility, the existing approaches may still cause a biased result. In order to promote further development, this study focuses on the economic feasibility analysis of the RE project on the basis of consumer utility in the whole life cycle. Therefore, an integrated approach is proposed, which consists of triangular fuzzy numbers (TFNs), an analytic hierarchy process (AHP) and data envelopment analysis (DEA). The first step is to determine the comprehensive cost index weights of DEA by TFN–AHP. Secondly, to solve the problem, the first DEA model, which is proposed by A. Charnes, W. W. Cooper and E. Rhodes (C 2 R), is established to calculate the DEA effectiveness. Then, the third task involves designing a computer-based intelligent interface (CBII) to simplify realistic application and ensure performance efficiency. Finally, a solar water heater case study is demonstrated to validate the effectiveness of the entire method’s system. The study shows that this could make investors’ lives easier by using the CBII scientifically, reasonably and conveniently. Moreover, the research results could be easily extended to more complex real-world applications.

Suggested Citation

  • Lu Gan & Dirong Xu & Lin Hu & Lei Wang, 2017. "Economic Feasibility Analysis for Renewable Energy Project Using an Integrated TFN–AHP–DEA Approach on the Basis of Consumer Utility," Energies, MDPI, vol. 10(12), pages 1-21, December.
    • Handle: RePEc:gam:jeners:v:10:y:2017:i:12:p:2089-:d:122264
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/10/12/2089/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/10/12/2089/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Martin, Rebecca & Lazakis, Iraklis & Barbouchi, Sami & Johanning, Lars, 2016. "Sensitivity analysis of offshore wind farm operation and maintenance cost and availability," Renewable Energy, Elsevier, vol. 85(C), pages 1226-1236.
    2. Sundt, Swantje & Rehdanz, Katrin, 2015. "Consumers' willingness to pay for green electricity: A meta-analysis of the literature," Energy Economics, Elsevier, vol. 51(C), pages 1-8.
    3. Lee, Chul-Yong & Heo, Hyejin, 2016. "Estimating willingness to pay for renewable energy in South Korea using the contingent valuation method," Energy Policy, Elsevier, vol. 94(C), pages 150-156.
    4. Goel, Sonali & Sharma, Renu, 2017. "Performance evaluation of stand alone, grid connected and hybrid renewable energy systems for rural application: A comparative review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 78(C), pages 1378-1389.
    5. Macharis, Cathy & Springael, Johan & De Brucker, Klaas & Verbeke, Alain, 2004. "PROMETHEE and AHP: The design of operational synergies in multicriteria analysis.: Strengthening PROMETHEE with ideas of AHP," European Journal of Operational Research, Elsevier, vol. 153(2), pages 307-317, March.
    6. Wiser, Ryan & Bolinger, Mark & Heath, Garvin & Keyser, David & Lantz, Eric & Macknick, Jordan & Mai, Trieu & Millstein, Dev, 2016. "Long-term implications of sustained wind power growth in the United States: Potential benefits and secondary impacts," Applied Energy, Elsevier, vol. 179(C), pages 146-158.
    7. V V Podinovski, 2004. "Bridging the gap between the constant and variable returns-to-scale models: selective proportionality in data envelopment analysis," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 55(3), pages 265-276, March.
    8. Park, Eunil, 2017. "Potentiality of renewable resources: Economic feasibility perspectives in South Korea," Renewable and Sustainable Energy Reviews, Elsevier, vol. 79(C), pages 61-70.
    9. Arman Aghahosseini & Dmitrii Bogdanov & Christian Breyer, 2017. "A Techno-Economic Study of an Entirely Renewable Energy-Based Power Supply for North America for 2030 Conditions," Energies, MDPI, vol. 10(8), pages 1-28, August.
    10. Kahraman, Cengiz & Cebeci, Ufuk & Ruan, Da, 2004. "Multi-attribute comparison of catering service companies using fuzzy AHP: The case of Turkey," International Journal of Production Economics, Elsevier, vol. 87(2), pages 171-184, January.
    11. Lantz, Eric & Mai, Trieu & Wiser, Ryan H. & Krishnan, Venkat, 2016. "Long-term implications of sustained wind power growth in the United States: Direct electric system impacts and costs," Applied Energy, Elsevier, vol. 179(C), pages 832-846.
    12. Charnes, A. & Cooper, W. W. & Rhodes, E., 1979. "Measuring the efficiency of decision-making units," European Journal of Operational Research, Elsevier, vol. 3(4), pages 339-338, July.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Chia-Nan Wang & Van Thanh Nguyen & Hoang Tuyet Nhi Thai & Ngoc Nguyen Tran & Thi Lan Anh Tran, 2018. "Sustainable Supplier Selection Process in Edible Oil Production by a Hybrid Fuzzy Analytical Hierarchy Process and Green Data Envelopment Analysis for the SMEs Food Processing Industry," Mathematics, MDPI, vol. 6(12), pages 1-16, December.
    2. Tien-Chin Wang & Su-Yuan Tsai, 2018. "Solar Panel Supplier Selection for the Photovoltaic System Design by Using Fuzzy Multi-Criteria Decision Making (MCDM) Approaches," Energies, MDPI, vol. 11(8), pages 1-22, July.
    3. Guoqiang Sun & Xiaoliu Ding & Zhinong Wei & Peifeng Shen & Yang Zhao & Qiugen Huang & Liang Zhang & Haixiang Zang, 2019. "Intelligent Classification Method for Grid-Monitoring Alarm Messages Based on Information Theory," Energies, MDPI, vol. 12(14), pages 1-18, July.
    4. Mohd Chachuli, Fairuz Suzana & Mat, Sohif & Ludin, Norasikin Ahmad & Sopian, Kamaruzzaman, 2021. "Performance evaluation of renewable energy R&D activities in Malaysia," Renewable Energy, Elsevier, vol. 163(C), pages 544-560.
    5. Abbas Mardani & Dalia Streimikiene & Tomas Balezentis & Muhamad Zameri Mat Saman & Khalil Md Nor & Seyed Meysam Khoshnava, 2018. "Data Envelopment Analysis in Energy and Environmental Economics: An Overview of the State-of-the-Art and Recent Development Trends," Energies, MDPI, vol. 11(8), pages 1-21, August.
    6. Chia-Nan Wang & Van Thanh Nguyen & Hoang Tuyet Nhi Thai & Duy Hung Duong, 2018. "Multi-Criteria Decision Making (MCDM) Approaches for Solar Power Plant Location Selection in Viet Nam," Energies, MDPI, vol. 11(6), pages 1-27, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zerrahn, Alexander, 2017. "Wind Power and Externalities," Ecological Economics, Elsevier, vol. 141(C), pages 245-260.
    2. Qin, Chao & Saunders, Gordon & Loth, Eric, 2017. "Offshore wind energy storage concept for cost-of-rated-power savings," Applied Energy, Elsevier, vol. 201(C), pages 148-157.
    3. Su, Yufei & Kern, Jordan D. & Characklis, Gregory W., 2017. "The impact of wind power growth and hydrological uncertainty on financial losses from oversupply events in hydropower-dominated systems," Applied Energy, Elsevier, vol. 194(C), pages 172-183.
    4. Freitas Gomes, Icaro Silvestre & Perez, Yannick & Suomalainen, Emilia, 2020. "Coupling small batteries and PV generation: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).
    5. Dastan Bamwesigye, 2023. "Willingness to Pay for Alternative Energies in Uganda: Energy Needs and Policy Instruments towards Zero Deforestation 2030 and Climate Change," Energies, MDPI, vol. 16(2), pages 1-21, January.
    6. Chaikumbung, Mayula, 2021. "Institutions and consumer preferences for renewable energy: A meta-regression analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    7. Yao Zhang & Wenxuan Yao & Shutang You & Wenpeng Yu & Ling Wu & Yi Cui & Yilu Liu, 2017. "Impacts of Power Grid Frequency Deviation on Time Error of Synchronous Electric Clock and Worldwide Power System Practices on Time Error Correction," Energies, MDPI, vol. 10(9), pages 1-15, August.
    8. Jorgenson, Jennie & Denholm, Paul & Mai, Trieu, 2018. "Analyzing storage for wind integration in a transmission-constrained power system," Applied Energy, Elsevier, vol. 228(C), pages 122-129.
    9. Cohen, Stuart M. & Caron, Justin, 2018. "The economic impacts of high wind penetration scenarios in the United States," Energy Economics, Elsevier, vol. 76(C), pages 558-573.
    10. Yu, Ying & Yamaguchi, Kensuke & Thuy, Truong Dang & Kittner, Noah, 2022. "Will the public in emerging economies support renewable energy? Evidence from Ho Chi Minh City, Vietnam," Renewable and Sustainable Energy Reviews, Elsevier, vol. 169(C).
    11. Alkhalidi, Mohamad A. & Al-Dabbous, Shoug Kh. & Neelamani, S. & Aldashti, Hassan A., 2019. "Wind energy potential at coastal and offshore locations in the state of Kuwait," Renewable Energy, Elsevier, vol. 135(C), pages 529-539.
    12. Mulder, Machiel & Scholtens, Bert, 2016. "A plant-level analysis of the spill-over effects of the German Energiewende," Applied Energy, Elsevier, vol. 183(C), pages 1259-1271.
    13. Dalia Streimikiene & Tomas Balezentis & Ilona Alisauskaite-Seskiene & Gintare Stankuniene & Zaneta Simanaviciene, 2019. "A Review of Willingness to Pay Studies for Climate Change Mitigation in the Energy Sector," Energies, MDPI, vol. 12(8), pages 1-38, April.
    14. Dylan Harrison-Atlas & Galen Maclaurin & Eric Lantz, 2021. "Spatially-Explicit Prediction of Capacity Density Advances Geographic Characterization of Wind Power Technical Potential," Energies, MDPI, vol. 14(12), pages 1-28, June.
    15. Dong, Changgui & Sigrin, Benjamin, 2019. "Using willingness to pay to forecast the adoption of solar photovoltaics: A “parameterization + calibration” approach," Energy Policy, Elsevier, vol. 129(C), pages 100-110.
    16. Zohreh Moghaddas & Alireza Amirteimoori & Reza Kazemi Matin, 2022. "Selective proportionality and integer-valued data in DEA: an application to performance evaluation of high schools," Operational Research, Springer, vol. 22(4), pages 3435-3459, September.
    17. Díaz, Guzmán & Coto, José & Gómez-Aleixandre, Javier, 2019. "Levelized income loss as a metric of the adaptation of wind and energy storage to variable prices," Applied Energy, Elsevier, vol. 238(C), pages 1179-1191.
    18. Sajid Ali & Choon-Man Jang, 2020. "Optimum Design of Hybrid Renewable Energy System for Sustainable Energy Supply to a Remote Island," Sustainability, MDPI, vol. 12(3), pages 1-16, February.
    19. Dagher, Leila & Mansour, Mohamad, 2020. "What can GCC countries learn from well-established green power markets in other countries?," MPRA Paper 116073, University Library of Munich, Germany.
    20. Wiser, Ryan & Millstein, Dev & Mai, Trieu & Macknick, Jordan & Carpenter, Alberta & Cohen, Stuart & Cole, Wesley & Frew, Bethany & Heath, Garvin, 2016. "The environmental and public health benefits of achieving high penetrations of solar energy in the United States," Energy, Elsevier, vol. 113(C), pages 472-486.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:10:y:2017:i:12:p:2089-:d:122264. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.