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Decision-making in energy planning.Application of the Electre method at regional
level for the diffusion of renewable energy
technologyM. Beccali, M. Cellura ∗, M. Mistretta
Dipartimento di Ricerche Energetiche e Ambientali, Universita degli Studi di Palermo,
Viale delle Scienze, 90128 Palermo, Italy
Received 19 December 2002; accepted 12 March 2003
Abstract
The authors show an application of the multicriteria decision-making methodology used toassess an action plan for the diffusion of renewable energy technologies at regional scale. Thismethodological tool gives the decision-maker considerable help in the selection of the mostsuitable innovative technologies in the energy sector, according to preliminary fixed objectives.In this paper, a case study is carried out for the island of Sardinia. This region presents, onone hand, a high potential for energy resources exploitation, but on the other hand, it representsa specific case among other Italian regions, because of its socio-economic status and history.
Three decision scenarios have been supposed, each one representing a coherent set of actions, on the basis of which strategies of diffusion are developed.
Keywords: Multicriteria decision-making; Renewable energy technologies
1. Introduction
Energy planning processes usually include a study of sectorial demand and supply,forecasts of the trends of input–output items, based on economics and technologicalmodels, and a list of actions, collecting several measures voted to fulfill the main
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objectives of the energy plan. This action plan (AP) is addressed to specific strategies
and interventions, which are able to fit, in the best way, demand and supply, accord-
ing to the many constraints and factors.
The addressing of these needs could be supported by the adoption of multicriteriaapproaches in the selection of the most suitable action among all the alternatives.
The selection of the alternative options derives from the goal set identified by the
decision-maker (DM), with regard to the environmental, technical and economical
spheres.
A decision support approach, called Electre III [1], is presented for energy plan-ning application. This method also represents the first methodology with fuzzy con-
cepts incorporated in it, able to help the decision-maker to select the most suitable
innovative technologies in the energy sector [2].
2. Multicriteria decision-making methods and the Electre III approach
In a decisional process the making of choices derives from complex hierarchical
comparisons among alternative options, which are often based on conflictual criteria.
A large number of external variables plays a relevant role in orienting decision-
making. Some of these can be manipulated by numerical models, such as cost –benefit
analysis, market penetration strategies and environmental impacts. Other factors,
dealing with social and cultural context, political drawbacks and aesthetic aspects,
can be assessed only in a qualitative way or with subjective judgment [3]. The aimsof multicriteria decision-making methods (MDMM) are generally the following [4]:
to aid decision-makers to be consistent with fixed ‘general’ objectives;
to use representative data and transparent assessment procedures;
to help the accomplishment of decisional processes, focusing on increasing its
ef ficiency.
The Electre III method, in which the criteria of the set of decisional alternatives
are compared by means of a binary relationship, defined as ‘outranking relationship’,
are more ‘flexible’ than the ones based on a multi-objective approach [5].In detail, the following paragraphs will describe the steps, which characterize the
Electre III methodology.
3. The Electre III methodology
3.1. Definition of the actions to be assessed (decisional objectives)
This consists in the definition of a set of potential alternatives or actions A =
( A1, A2,... Ai) to be assessed in the evaluation process.It is quite relevant because the selected actions have to synthesize significantly
the state of art, as regards technological issues, economic factors and production
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systems at different levels of intervention. In such a way, the DM can have a com-
plete framework of different performances of planning alternatives.
3.2. Criteria of evaluation and evaluation of alternatives, according to eachcriterion
The criteria of evaluation have to provide tools of judgment for DM, which must
verify the consistence of choices with the expectations of the DM and with the needs
of the other involved actors. The main target of the analyst is to show the effectsof each alternative, by means of a set of suitable criteria, F = {1,2,...j,... m}, which
allows constitution of a rank order of the alternatives [6].
Given two alternatives Ai and Ak , assume that g j = g j( Ai) and g j = g j( Ak ) express
the performance values of Ai and Ak , respectively, according to the jth criterion. Ai
is predominant over Ak , if and only if:
g j( Ai) g j( Ak ) ∀ jF (1)
The inequality (1) must be verified for at least one criterion. F is consistent if it
is accepted by all the actors involved in the decisional process.
Criteria express qualitative or quantitative viewpoints, objectives, aptitudes, and
constraints of an action, and allow assessment of the alternatives, by means of a
rank order.
A coherent set of criteria has to fulfill the following requirements:
Exhaustivity: criteria must not be insuf ficient or in excess:
If ∀F, g j( Ai) = g j( Ak ) ⇒ Ai and Ak are indifferent
If the DM does not consider the previous statement to be true, then it implies that
some important evaluation criteria have not been taken into account.
Coherence: the set of decision-maker’s preferences on each criterion has to be con-
sistent with the global preferences:If g j( Ai) = g j( Ak ) ∀ j k and gk ( Ai) gk ( Ak ) ⇒ Ai is preferred to Ak
Not redundancy: criteria must not be in excess and must not be duplicated. Deleting
some criteria can make invalid one of the previous condition for
at least a pair of actions.
3.3. De finition of aggregation procedure
Aggregation of criteria is necessary to give a synthetic judgment, stemming from
the results of the criteria application. In particular, the Electre III approaches are
characterized by a partial aggregation of preferences.
Under the above considerations, it is possible to define the outranking relation of
the alternative Ai on the alternative Ak , as a binary relation on A, if it is possible
clearly to assert that ‘ Ai is at least as good as Ak , given the problem essence, the
DM’s preferences and the quality of the assessment about each alternative’ [7].The hypothesis of outranking is supported by two test conditions: (1) concordance;
and (2) discordance. An index, which is defined in the range [0,1], provides a judg-
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ment on the degree of credibility of each outranking relation and represents a test
to verify the performance of each alternative.
While a criterion is defined as a rigid tool1 according to the classic conception,
the Electre methodology introduces the flexible concept of pseudo-criterion. It definesan indifference condition in a ‘zone’ where the difference between Ai and Ak is
rather small.
A zone of weak preference is also defined between the zones of indifference and
strict preference. Such zones represent uncertainty between indifference and strict
preference conditions [8].The above procedure allows net judgments to be avoided, when data are not com-
pletely available and are uncertain.
An indifference threshold q j and a strict preference threshold p j are fixed, with
regard to the jth criterion. In particular, q j indicates the minimum boundary of uncer-
tainty, associated with the performed calculations, while p j can be considered as the
maximum boundary of error, connected to the performed calculations. Therefore, a
pseudo-criterion is a function g j, in which the discriminant capacity is characterized
by two ∀Ai and Ak A thresholds, indicated with q j and p j and defined as follows:
Ai and Ak are indifferent if:
|g j( Ai) g j( Ak )| q j (2)
Ai is weakly preferred to Ak if:
q j [g j( Ai) g j( Ak )] p j (3)
Ai is strictly preferred to Ak if:
g j( Ai) g j( Ak ) p j (4)
According to the same criterion it is always true that:
q j p j (5)
A pseudo-criterion becomes a real criterion if:
q j p j (6)
For the jth criterion it can be defined the so-called veto threshold v j, as the limitvalue of the difference g j( Ak )g j( Ai), over which it is reasonable to reject the hypoth-
esis of outranking of Ai over Ak , with regard to the considered criterion. It implies
that:
q j p j v j (7)
The above thresholds are not experimental values, of which the exact score is
required, but they are suitable quantities that experts introduce in order to make the
methodology more flexible, taking into account data uncertainty and approxi-
mation [9].
1 If Ai and Ak are not mutually indifferent, then Ai is preferred to Ak or vice versa.
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3.4. Weighting of criteria
Weighting is carried out, according to the simplified Simos approach [10], basedon the following items:
– a first ranking of criteria;– a subsequent assignment of weights, depending on each criterion rank.
Table 1 shows a detailed example of the above weighting procedure.
3.5. Indices of concordance
In the comparisons among different alternatives, the analyst calculates the twofollowing indices to assess the degree of concordance between such comparisons
and the adopted system of weights and thresholds:
– The index of concordance under a given criterion;
– The index of global concordance.
The first one, indicated by c j( Ai, Ak ), informs us about the strength of preference
for the alternative Ai, with respect to the alternative Ak , under the jth criterion. This
is a function of the difference g j( Ak )
g j( Ai) and is defined in this way:c j( Ai, Ak ) 0⇔ p j g j( Ak )g j( Ai) Ak is strictly preferred to Ai (8)
0 c j( Ai, Ak ) 1⇔q j g j( Ak )g j( Ai) p j Ak is weakly preferred to Ai (9)
c j( Ai, Ak ) 1⇔g j( Ak )g j( Ai)q j Ak and Ai are indifferent (10)
where p j and q j are the strict preference and indifference thresholds, respectively. In
other words, c j( Ai, Ak ) shows the degree of concordance with the judgmental state-
ment that Ai outranks (is at least as good as) Ak . It decreases linearly from the toplevel as soon as g j( Ak ) has passed the indifference threshold, and it arrives at the
bottom level as soon as g j( Ak ) has reached the preference threshold.The index of global concordance C ik represents the amount of evidence to support
the concordance among all the criteria, under the hypothesis that Ai outranks Ak [11].
It is defined as the weighted average of all c j( Ai, Ak ) ∀F, with regard to the statement
that Ai outranks Ak :
C ik
m
j 1
W jc j( Ai, Ak )
m
j 1
W j
(11)
where W j is the weight associated with the jth criterion.
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– good actions in the two orders and not totally incomparable
– excellent actions in at least one of the two orders
– good actions in the two orders and at least excellent in one of the two orders.
4. Case study
4.1. Application of the Electre method to energy planning in Sardinia
This paper presents an application of the MDMM for the selection of the most
suitable technologies in a RET2 diffusion plan for the Sardinia region [13].
A set of technologies of energy conversion and saving, has been selected in order
to assess energy, environmental and economic effects, which are associated with
their diffusion in Sardinia. Such a set has been further restricted o nly to those techno-logies oriented to energy saving and renewable resources use. Table 2 shows the
Table 2
List of the selected actions to be diffused
Number Energy source Technology/Action Size
1 Solar energy Domestic solar water heaters Small
2 Solar water heating for large Medium–large
demands at low levels of
temperature3 PV roofs: grid connected system Medium–large
generating electric energy
(without storage)
4 Wind energy Wind turbines (grid connected) Medium–large (one turbine:
200 kW-1 MW)
5 Hydraulic energy hydro plants in derivation Medium–small (100 kW-2
schemes MW)
6 hydro plants in existing water Medium–small (1 MW)
distribution networks
7 Biomass high ef ficiency wood boilers Small (40 kWt)
8 CHP plants fed by agricultural Medium (10 MWe)
wastes or energy crops
9 Animal manure CHP plants fed by biogas Small ( 100 kWe)
10 Energy saving in Building insulation In all new building and in a
residential and large parte of existing ones
industry sectors
11 High ef ficiency lighting Wide
12 High ef ficiency electric Wide
householders appliances
13 High ef ficiency boilers Small–medium
14 CHP Plants coupled with refrigerating Medium–large (100 kW-500
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5.2. Technical maturity, reliability (criterion b)
It is essentially based on the state of art of the applied technology. The judgment
is expressed by means of a score encompassed within the range [1,4]. A rank orderis applied, with increasing preference from 1 to 4, as follows:
1. technologies that are only tested in laboratory;
2. technologies that are only performed in pilot plants, where the demonstrative goal
is linked to the experimental one, referring to the operating and technical con-ditions;
3. technologies that could be still improved;
4. consolidated technologies, which are close to reaching the theoretical limits of
ef ficiency.
5.3. Consistence of installation and maintenance requirements with local
technical know-how (criterion c)
Evaluation is oriented to a qualitative comparison between the complexity of the
considered technology, and the capacity of local actors of ensuring an appropriate
operating support.
Then the following qualitative scale of ranking is used:
1. insuf ficient technical background for installation/maintenance;2. middle technical background for installation/maintenance;
3. great technical background for installation/maintenance.
5.4. Continuity and predictability of performance (criterion d)
It is important to know if conditions of not continuous operational patterns canexist. This condition is often a characteristic of a given technology and does not
indicate a factor of unreliability.
However, when not continuous operational condition conveys toward condition
of unpredictability, it could be a sign of weakness.Therefore, judgment will be articulated according to the following scale:
1. unpredictable and not continuous operation;
2. predictable but not continuous operation;
3. predictable and continuous operation.
5.5. Cost of saved primary energy (criterion e)
The economic assessment of the different actions is made through the cost associa-
ted with the saving of a unit of primary energy (MJ).For a RET, the cost associated with the saving of primary energy is used.
In the same way, in thermal energy plants, which use renewable sources, energy
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saving depends on the ef ficiency of the substituted combustion system, strictly
referred to as the considered application.
As regard to the interventions of electricity and thermal energy saving, the saved
primary energy is calculated, referring to ef ficiency values of conventional pro-duction system, which are the Enel system for electricity and a ref erence thermal
generator of given ef ficiency for the thermal energy production [14].
The actualized cost C of a unit of produced, or saved energy, depends on the costs
of investment, of operation, and of the fuel used. It is also in fluenced by the typical
characteristics of the technology, such as ef ficiency, annual production, service life,by the nature of the energy source utilized, and by the money cost. It is calculated
in this way:
C
starting cost annualization factor annual costs
produced or saved energy (18)
It must be highlighted that earnings from the sale of energy are not considered in
this parameter. In this way the effects of tariff policies are avoided.
5.6. Sustainability according to greenhouse pollutant emissions (criterion f)
This criterion is introduced to measure the equivalent emission of CO2, which is
avoided by the examined action. Therefore it is a reference index, expressed in
grCO2 /MJ of saved primary energy. Also in this case, reference volumes of emissionof substituted conventional technologies have been considered.
5.7. Sustainability according to other pollutant emissions (criterion g)
Pollutants are divided into the following categories:
– air emissions mainly due to combustion process;
– liquid wastes, which are associated mainly with secondary products by fumestreatment or with process water;
– solid wastes, which are generated during the life cycle of actions.
Type and quantity of emissions, and costs associated with wastes treatments are
assessed. In order to have a synthetic index, the score is expressed through the fol-
lowing qualitative scale of values:
1. very high emissions, when each category is relevant;
2. high emissions, when at least two of the categories are relevant;3. middle emissions, when at least one category is relevant;
4. low emissions, when all the emissions category are insignificant or do not exist.
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Table 5
Levels of priority in the three decisional scenarios
Environmental-oriented scenario Economy-oriented scenario Energy saving andrationalization scenario
High priority High priority High priority
Sustainability according to Compatibility with political, Continuity and predictability
greenhouse pollutant emissions legislative and administrative of performances
situation
Sustainability according to other Market maturity Technical maturity, reliability
pollutant emissions
Land requirement labour impact Cost of saved primary energy
Sustainability according to other Technical maturity, reliability Targets of primary energy
environmental impacts saving in regional scale
Targets of primary energy saving in Cost of saved primary energyregional scale
Middle priority Middle priority Middle priority
Technical maturity, reliability Land requirement Sustainability according to
greenhouse pollutant
emissions
Consistence of installation and Consistence of installation and Sustainability according to
maintenance requirements with local maintenance requirements with other pollutant emissions
technical know-how local technical know-how
Continuity and predictability of Land requirement
performances
Cost of saved primary energy
labour impact
Low priority Low priority Low priority
Compatibility with political, Sustainability according to Market maturity
legislative and administrative greenhouse pollutant emissions
situation
Market maturity Sustainability according to other Labour impact
pollutant emissions
Sustainability according to other Compatibility with political,
environmental impacts legislative and administrative
situation
Continuity and predictability of
performancesTargets of primary energy saving
in regional scale
actions. It can be supposed that it assigns the highest importance to labor impact
among the social and economical criteria, locating them in the middle priority rank.
The other criteria of the same group are associated with the low priority rank.
All the criteria, which assess technical reliability of actions, are assigned to the
middle priority rank, except for the criterion of energy saving targets. In particular,the reduction of fossil fuel consumption represents not only an economic target, but
also one of the most relevant issue of environmental sustainability.
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8. ‘Economy-oriented’ scenario
One of the main targets of decision-makers is the promotion of RET, as a meansto increase enterprise capacity and generate new profit. In this sense, the possibilityto create new employments, the economical ef ficiencies of projects and the consist-
ence with the constraints and the legislative facilities represent the most relevant cri-
teria.
Besides, a good judgment on market maturity implies that the selected actions
show a high capability of market penetration.
The technical maturity criterion describes the reliability of a given technology,
which is associated with the safety of investment. The cost of primary energy saved
is a reliable indicator for the energetic and economical ef ficiency of the examined
technology.The two criteria land requirement and consistence with local technical know-how
are assigned in the middle priority rank. The first one is an environmental indicator,
which also has an economic implication. In fact, the increase of the occupied land
often involves an increase of initial operating costs. The last one measures the pres-
ence of a local technical know-how, suitable to allow the introduction of the giventechnology. The remaining criteria are associated with the low priority rank.
9. ‘Energy saving and rational use’ scenario
Since the selected technology must not reduce system reliability, the criteria of
technical maturity and continuity and predictability of performance are considered
with high priority, together with the energy-saving criterion. The cost of saved pri-
mary energy indicates a global measure of the convenience to substitute the conven-
tional primary sources with the resources used by the examined technologies.
Environmental criteria are assigned to the middle priority rank. In fact, the valoriz-ation of renewable energy technologies is connected with a reduction of the environ-
mental releases by the energy production processes.
The lowest priority is assigned to the social and economical criteria. In fact, itcan be supposed to overcome the possible legal and financial dif ficulties, due to the
selected strategy, by means of appropriate political or administrative interventions
in the considered social context.
10. Aggregation procedure
The thresholds of indifference, the strict preference and the veto thresholds are
defined. As these thresholds mainly depend on the nature and the reliability of avail-able data, and on the importance of each criterion in the evaluation, two terns of
values for each criterion are considered. The first one is valid when a given criterion
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does not assume the highest priority in the global evaluation, while the last one takes
value when it reaches the highest priority (Table 6).
11. Results
11.1. ‘ Environmental-oriented ’ scenario
The outcomes of the distillation procedure are the final order for each decisional
scenario. In each order a best actions area is defined as the area within which the
best alternatives are placed for both distillations. These alternatives represent the
actions that fulfill the objectives that the decision-maker has fixed.
In Fig. 2 the dotted area at the top right is the best alternative area. Actions 1, 4,6, 10, 11 and 12 belong to such an area. As regards to the excluded ones, actions
2 and 7 are the nearest to the best actions area.
Action 13 is the only excluded action that deals with building energy saving. The
other alternatives are excluded because their performances are too low in the most
significant criteria for the considered scenario. However, they also have a consistent
weight in the criteria of middle and high priority. For example, action 3 is excluded
from the best actions area, but it reaches high performances on average for the pri-
ority criteria in the considered scenario.
11.2. ‘ Economy-oriented ’ scenario
Actions 1, 2, 5, 6, 10, 11, 12 and 13 are the best ones (Fig. 3). Action 4 is the
best among the excluded ones, mainly depending on the evaluation in the criteria
of land requirement and labor impact. It must be remembered that earnings from
energy sales are not considered.
The low score of actions 11, 12, and 13 in labor impact is balanced by the good
values that these actions reach in the criterion cost of saved primary energy.
Table 6
Thresholds of veto, indifference and preference for the different criteria