An economic evaluation framework for assessing renewable energy projects

It is becoming increasingly imperative to integrate renewable energy, such as solar and wind, into electricity generation due to increased regulations on air and water pollution and a sociopolitical desire to develop more clean energy sources. This increased spotlight on renewable energy requires evaluating competing projects using either conventional economic analysis techniques or other economics-based models and approaches in order to select a subset of the projects to be funded. Even then, there are reasons to suspect that techniques applied to renewable energy projects may result in decisions that will reject viable projects due to the use of a limited number of quantifiable and tangible attributes about the projects. This paper presents a framework for economic evaluation of renewable energy projects. The framework is based on a systems approach in which the processes within the entire network of the system, from generation to consumption, are accounted for. Furthermore, the framework uses the concept of fuzzy system to calculate the value of information obtained under conditions of uncertainty.