Energy project performance evaluation with sustainability perspective

Energy is a means of economic development by raising living standards and reducing poverty. Electricity production is a vital process for households, industries and commercial activities. No two power plants are alike; they may vary in technology, size, cost, environmental aspects etc., so that evaluations shall be made on a project basis, rather than technologies. Evaluation of the best energy project among many alternatives is a complex problem which cannot be simplified to economic feasibility only, requiring investors to also consider environmental and social circumstances. This paper proposes a novel method with a sustainability perspective for better selecting concretely defined energy projects. This method is based on two multi-criteria decision making ('MCDM') techniques; AHP for determining the importance weights of evaluation criteria and VIKOR for ranking energy project alternatives. The work differentiates itself in its emphasis to analyze actual projects instead of generic energy technologies, its consideration of similar project scales, and the use of Group Decision Making ('GDM') for aggregating expert opinions. The applicability of the method is demonstrated on a case study from Turkey, where one thermal power and three renewable energy projects are compared and ranked analytically.