Risk management of photovoltaic power plants using a novel fuzzy multi-criteria decision-making method based on prospect theory: A sustainable development approach

Abstract

• The risks of photovoltaic power plants and their supply chains are studied. • A sustainable development approach is employed. • A new framework for risk management is proposed. • A fuzzy multi-criteria decision-making method based on prospect theory is proposed. • The results show that economic risks are the most significant threats. Due to limited fossil fuel resources and their negative environmental impacts, investment in solar photovoltaic energy has been increasing markedly. Benefiting from photovoltaic systems to fulfill the demand for energy is accompanied by various risks that must be considered. This research studies photovoltaic power plants and their supply chains. In particular, it proposes a new framework for risk management of them based on the five dimensions of sustainable development. This framework employs a combination of the failure mode and effects analysis (FMEA) and the proposed fuzzy election based on relative value distances (FERVD) method to assess and prioritize risks. This proposed fuzzy multi-criteria decision-making (FMCDM) method relies on prospect theory and fuzzy logic. The research benefits from literature review and expert interviews for the identification of risks. Expert opinions are also used for the assessment, prioritization, analysis, and treatment of these risks. The results indicate that 70% of total risks and 57% of critical risks are imposed on the supply chain from outside a power plant. Moreover, it is shown that economic risks, that account for 37% of total risks and 86% of critical risks, are by far the most significant threats to this industry, followed by technical and institutional risks. It is also demonstrated that photovoltaic energy has minimal adverse impacts on social and environmental dimensions of sustainability.