Economics of Energy and Treatment of Uncertainty to Incorporate Environmental Considerations in Investment Decisions

  • D. Diakoulaki
  • S. Mirasgedis
  • L. Papayannakis
Part of the Applied Optimization book series (APOP, volume 19)


Attributing costs to the environmental impacts of energy production can greatly assist in protecting the natural environment because monetary values are capable of directly influencing energy decisions without changing the rules of the market. Despite the considerable progress made recently in the valuation of environmental damages the reliability of the estimated damage costs is still strongly disputed. This paper is aimed at removing the major sources of uncertainty and generating mean cost values to be used in the selection of energy investments for the expansion of an autonomous electricity system. To this purpose, the costs associated with a set of competing energy technologies are expressed as triangular fuzzy numbers and a fuzzy ranking approach has been applied in order to provide representative crisp cost values.


Energy Environment External cost Uncertainty Fuzzy sets Fuzzy ranking 


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Copyright information

© Springer Science+Business Media Dordrecht 1998

Authors and Affiliations

  • D. Diakoulaki
    • 1
  • S. Mirasgedis
    • 1
  • L. Papayannakis
    • 1
  1. 1.Laboratory of Industrial and Energy EconomicsNational Technical University of AthensGreece

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