Economic Analysis of Energy Projects with Uncertainty
Publication: Journal of Energy Engineering
Volume 116, Issue 1
Abstract
The lack of precision in an economic analysis of an energy production facility is expressed quantitatively with an uncertainty to the 68% confidence level. The sensitivities of various parameters to imperfect projections is propagated through a fairly simple technique into an overall uncertainty for the feasibility indicator, such as benefit‐cost (BC) ratio. The technique assumes that each of the variable parameters is unrelated, from a Gaussian population, and that the individual sensitivities have a normal probability distribution. The effects of these assumptions on applications of the uncertainty technique are described. The technique is illustrated through a case study involving the economic analyses of hydropower feasibility.
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Information & Authors
Information
Published In
Journal of Energy Engineering
Volume 116 • Issue 1 • April 1990
Pages: 1 - 16
Copyright
Copyright © 1990 ASCE.
History
Published online: Apr 1, 1990
Published in print: Apr 1990
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