A Multi‐Criteria Framework to Evaluate the Sustainability of Renewable Energy: A 2‐Tuple Linguistic Grey Relation Model from the Perspective of the Prospect Theory

Abstract

The unique resources and environmental advantages of renewable energy make it an essential component of energy strategies and a meaningful way to achieve “carbon neutrality”. However, due to limitations relating to ecological factors and geographical locations, renewable energy power generation faces many problems, including instability, resulting in unsustainable development. Few studies have been conducted on the sustainability of renewable energy. Therefore, a multi‐criteria decision‐making (MCDM) framework for evaluating renewable energy sustainability is put forward. Based on a 2‐tuple linguistic grey relation model and the prospect theory, the MCDM framework can comprehensively analyze the factors that may influence renewable energy sustainability in terms of resources, the environment, society, technology, and the economy. The combination of the 2‐tuple linguistic model and the prospect theory can improve the objectivity of decision making. Taking China as the research object, this study finds that the profit–loss ratios for the four alternatives considered are{0.969,0.432,0.395,0.369} for solar photovoltaic power, wind power, hydropower, and biomass power, respectively, ranked from best to worst. Based on the sensitivity analysis, the MCDM framework can change its parameters based on the relevant psychological characteristics and then establish a suitable system for decision making. The MCDM framework proposed in this study can provide investors with decision‐making references and help governmental agencies formulate renewable energy policies.