Inderscience Publishers

Computing with words on energy options? Towards decision-making under risk and uncertainty

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Nature's real estate, such as water, minerals, oil and gas, and coal, is the precious gift available for the welfare of mankind since time immemorial. In spite of the efforts initiated by many countries in the development of non-conventional energy resources, it is too early to visualise that the gap between supply and demand of energy for the peaceful purpose could be bridged in the near future. This paper begins with a commentary on decision-making under risk and the important aspects of the expected utility theory and prospect theory. Further, an illustrative example describing decision-making for the energy prospects (options) under risk is presented. We believe that the decision of selecting energy options could also be approached with less computational bother as is intended in prospect theory. Computing with Words (CW) proposed by Professor Lotfi Zadeh, the father of fuzzy logic, could be a useful armamentarium in this quest.

Keywords: decision making, risk, uncertainty, prospect theory, energy options, computing with words, energy supply, energy demand, fuzzy logic, renewable energy, nuclear energy, nuclear power plants, plant location, hydro energy, thermal energy, perception-based modelling, environmental impact, energy risks

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