Application of integrated strengths, weaknesses, opportunities, and threats and analytic hierarchy process methodology to renewable energy project selection in Serbia

Abstract

Renewable energy sources (RES) can be a significant source of profit. However, different RES projects can bring various benefits to their investors, raising the question—Which RES project to select? The objective of this study is to provide answers to two questions: (1) Which factors/criteria should be used in the RES project selection procedure; (2) Which RES project should the investor select out of a group of prospective projects? The study was conducted in a company operating in the energy sector in Serbia. In order to find answers to the above-mentioned questions, the study employed a hybrid methodology integrating the SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis and the Analytical Hierarchy Process (AHP). First, the Company's management defined the goal and project alternatives. The goal was to select an optimal RES project suitable for the specific circumstances in the Serbian energy sector, and also for the Company's potentials. The alternatives included: a hydro energy project, a solar energy project, a wind energy project (WEP), and a biomass energy project. Then, the decision-making group was formed, consisting of four company's experts (hereinafter collectively referred to as “the decision-makers”), of different professional backgrounds and affiliations. Second, the decision-makers employed SWOT analysis on the RES projects in Serbia to obtain the decision-making criteria. The decision-making procedure has to be based on 20 SWOT factors. However, each criterion is not of equal importance for investors. This shortcoming has been overcome by introducing AHP. Pairwise comparison was performed using the Expert Choice 2000 software. According to the results, the top-ranking project is the WEP.

SWOT-AHP method application to determine current energy situation and define strategies for energy security improvement

“…The AHP is a effective decision making method especially when subjectivity exists and it is very suitable to solve problems where the decision criteria can be organized in a hierarchical way into sub-criteria [18]. The SWOT-AHP method is applied for solving different issues in many areas such as environment [15], agriculture [19], sport [20] and energy [21][22][23][24][25][26]. Also, SWOT-AHP is employed in literature to determine and evaluate strategies: [27] evaluate the management strategies of a forestland estate, [28] determine the business strategy in textile firm, [29] define strategy for Turkish chemicals industry; [30] develop and evaluate innovative strategies to overcome biomass supply problems and increase the competitiveness of wood-based energy production.…”

Combined Heat and Power Plant Installation at Oil and Gas Fields: Is It Cost-Effective?

“…Development prospects lie in unconventional energy sources and Serbia is a great potential with its sources such as wind, solar and geothermal energy. The total renewable energy sources potential that is technologically available in the Republic of Serbia is estimated at 5.65 million tons of oil equivalent (toe) per year [5].…”

Selection of biomass thermochemical conversion technology in the Netherlands: A best worst method approach

“…Some research has been conducted on which renewable energy technology alternative should be invested in in general. For example, recently, Haddad et al (2017) and Al Garni (2016) find that solar power is best applicable for Algeria and Saudi Arabia respectively while Stojcetovic et al (2016) find that wind energy is most suited for a company based in Serbia and Streimikiene (2016) finds that for Lithuania the biomass technology alternative is most suitable. However, these scholars focus on renewable energy technologies in general while our study focuses specifically on the biomass technology and various competing options within this domain.…”