Risk Analysis and Assessment of Wind Power Project

Chongming Liu, Yirong Jiang North China Electric Power University Beijing, China liu-chongming@sohu.com
Abstract-Wind power as a kind of renewable clean energy source, which has a very important significance for energy conservation and social efficiency. But now, wind power development has not yet formed a complete system, and there are different kinds of risks exist in wind power project development process. This paper conduct a detailed study for this, analyzes the risk factors including natural disaster risks, technology risks, economic risks, and policy risks in four aspects, then construct a fuzzy comprehensive evaluation model, and use the model in a wind power project on risk assessment, which verifies the feasibility and effectiveness of the evaluation model.

Keywords-wind power; risk analysis; risk assessment

I.

INTRODUCTION

In recent years, global wind power continues to maintain rapid development. In 2008, the total of world's wind power installed capacity reached 12.0791 billion kW, which higher than the average growth rate in the past 10 years. But avoiding blind investment and preventing resources waste are very significance [1]. There are a number of documents only to research the technical risk of wind power projects, but have not form a complete and scientific index system and evaluation methods to evaluate the overall risk of wind power projects in situation, which can not give a quantitative, clear and overall conclusion of the feasibility [2]. This paper establishes a multi-level index system of wind power projects, uses the fuzzy comprehensive evaluation method for risk evaluation of wind power projects, which provides a more scientific method of quantitative measurement for the comprehensive evaluation of the risk of wind power projects.
II. RISK FACTORS FOR WIND POWER PROJECTS Wind power projects are generally large-scale projects, the construction and operation process inevitably will be affected a number of factors.

A.

Windpower project risk characteristics Wind power project risk characteristics: (1) risk through the whole process; (2) risk change with regularity; (3) risk of change in force majeure; (4) risk change with opportunistic; (5) risk change with objectivity. Through the above description of the risk related knowledge we can know the risks of wind power projects with great uncertainty, decision-makers when conducting risk analysis need to avoid the impact of subjective factors, should to analyze the factors for the objectivity, during the analysis we considering the benefits, we should also consider the possible their loss arising from risks.
978-1-4244-6065-6/10/$26.00 2010 IEEE

Risk assessments a/windpower projects Risk assessment methods commonly include qualitative and quantitative analysis. Common methods of qualitative analysis of risk are expert scoring method, brainstorming and Delphi method, which are comparison of representative. The advantages are analysis risk factors for each specific and determine the size of the risk, but the disadvantage is not easily quantified, has some human factors. In the process of Quantitative analysis, to quantify the risk factors by mathematical models to quantify the size of the risk events probability and risk events impact on the project. According to the characteristics of wind power projects, risk factor analysis only use qualitative or quantitative analysis methods are not comprehensive, therefore, this article uses the Fuzzy comprehensive evaluation method based on combination of quantitative and qualitative analysis.

Through the combination of the characteristics of wind power projects described above, we analyze the risk factors on wind power. This article analyzes the following four aspects of risks: CD natural disaster risks which may be faced in wind power project development and construction and operation of the whole process , so there must be adequate precautions to minimize the losses caused by natural disasters. Such as storms, cold, dust storms, earthquakes, thunder, lightning and typhoons, lightning, salt spray, tsunami in coastal areas, which have a major impact on wind power projects and large equipment. technical risks, which are more extensive and can be affected with a lot of factors. Such as the design, construction and operational technology risks, are closely linked. @ economic risks. After the wind power projects are put into operation, the economic benefits of the project are important factors in whether the industry, which can run smoothly, also important to the development. @ policy risks. Wind power installed capacity is small, generally not as the main power supply, so network does not take advantage of the scheduling process. At the same time a large initial investment of wind power projects, the proportion of fixed costs and unit cost are larger, and therefore in the bidding process it does not have a price advantage. But wind power is renewable and clean energy, under the dual pressures of energy shortages and climate change, its advantage is very obvious. Because of this, wind power projects and wind power industry whether can smoothly development depends on support for national policy in some extent [3].

B.

Its basic principle is that using quantitative analysis shows evaluation results as far as possible, and then supplements them with qualitative analysis in an evaluation indicator. Also in the

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qualitative analysis, we should use the indirect analysis of the relevant data in the contents to supplement, in order to more precisely specify the nature and conclusions. III. THE FUZZY COMPREHENSIVE EVALUATION MODEL OWER PROJECT Most risk factors for wind power projects cannot be quantitative, so there is a certain ambiguity. The generation of fuzzy theory to solve the problem of quantitative analysis provides theoretical support [4]. This method uses the basic principles of fuzzy mathematics, through setting the evaluation set and a range of indicators of changes to make a division, and analysis indicators belong to the degree of evaluation grades. Fuzzy synthesis theory is to synthesize of the indicator data to obtain an evaluation of the fuzzy vector, which can description of complex things more in-depth and objective and a more objective assessment of facts. Wind power project based on the analysis of risk factors, the above risk factors for wind power projects are divided into the following hierarchy structure model.
TABLE I WIND POWER PROJECT HIERARCHY STRUCTURE MODEL OF RISK FACTORS
Natural Disaster Risk (AI) Technical risk (A2) Risk Factors

and weaknesses of the evaluation set V has been determined, so there is no need for building Hierarchical model and the total level of sorting. 1) Structure comparison matrix.
TABLE II COMPARISON MAXTRI X
At Al A2 A3 A4 A2 A3 A4

all a21 a31 a41

a12 a22 a32 a42

a13 a23 a33 a43

a14 a24 a34 a44

Scale with 1 to 9 and their last, on the concentration of each factor in the relative importance of each evaluation factor compared calibration.
TABLE III
Assignment 1 3 5 7 9

CLASS RATIO SCALE TABLE

Description

Represent that important than

xi

Xi

is as important as

Represent that compared to xj Represent that compared to xj important than important than important
xi x; xi

, , ,

xi

Xi

is slightly more is obviously more is strongly more is extremely more

Climatic conditions (A II) Geological conditions (A 12) Design technical risks (A 21) Construction Technical Risk (A 22) Run the risk of (A 23) Price (A 31) Internet access charge (A 32)

Xi

Represent that compared to xj Represent that compared to xj

Xi

Xi

Economic risks (A3)

Financial risk (A 33) Investment Budget Management (A 34) Industrial policy (A 41) Price policy (A 42) Internet power policy (A 43)

2, 4, 6, 8 corresponding to the middle of two adjacent judge situations

Reciprocal

xi

and

xj

have compared indicators to judge the value of the a u

=

Policy risks (A4)

II ajj
=

aij ,

In judging matrix
A.

aiaj)O; when i=j, aij =1; aij

a Lai}
i=1

II aji

Determine the factors set and evaluation set. Evaluation factor set is a collection of objects of the evaluation factors, if the factors n, can be expressed

which each state is expressed as V = VI' V2' , V m ,in wind power project risk assessment, we will evaluate the set is defined as V = {greatest risk, great risk, medium risk, small risk, smaller risk }[5].

as U = U1, U2' , Un evaluation of different fuzzy sets is that the set of evaluation can be based on the actual situation Assessment grades will be divided into m, said a factor in

};

2) Single-level sorting. Calculation of the Matrix, find the weight of each layer of the evaluation factors, and factors that set the weight of each layer were normalized.

b i}

..

(i,j

1,2,,n)

(1)

Wi= 'Lbij Wi: Layers of factors that set of weights. Wi= lf

(2) (3)

Determining the weights of evaluation indexes As the importance of factors that focus on different factors, need to adopt some method of weight assessment. AHP as a combination of quantitative and qualitative system analysis method, suitable for the calculation of the weight factor, the main steps: building a hierarchical model, structural comparison matrix, single-level sorting, consistency test, the total level of sorting. As the evaluation of program strengths

B.

3) Consistency test. Comparison matrix IS constructed around thinking to maintain continuity, consistency. Only when the matrix is fully consistent, the comparison matrix can exist [6]. Calculate the maximum eigenvalue Amaxof comparison matrix, introduce consistency index C. I. into matrix, the

512

evaluation random consistency index R. I. (Its value can be search from table N), the consistency ratio, The formula is as follows:
Amax =.!. ..J W; n i=l Wi

(4)

level of evaluation results, which is only the previous level of single factor evaluation. In order to find the comprehensive evaluation of the previous level must use second-level fuzzy comprehensive evaluation. Here, second-level fuzzy compre hensive evaluation of single-factor evaluation matrix R is:

C.I.=

n C.R.= C.I.I R.I.

Amax- n

(5)

R= [B B2' , Bm =
P

]T

Alo Rl A 2 0 R2
Rm

Of which: RI to evaluate the random consistency index, the following table N.

TABLE N
n
VALVE OF

EvALVAnON RANDOM CONSISTENCY INDEX 6 1.26 7 1.36 8 1.41 9 1.46 10 1.49 11 1.52

(8) The second-level comprehensive evaluation model can be expressed as:

Arno

3 0.58

4 0.89

5 1.12

R.I

As long as it meet C. R. <0.1, the comparison matrix satisfy the consistency that can be accepted. Build membership matrix Membership rij is means the number of evaluation of the main object in a particular evaluation made in the Uj side evaluation of the probability of Vj. Under each judge reviews the number of experts agree with dividing the total number of experts shall be received by numerical evaluation is this indicator correspond to the membership of set evaluation. Calculate the membership degree of each index can be fuzzy comparison matrix. 1) The Single-level fuzzy comprehensive evaluation: The first to establish the fuzzy evaluation matrix:
R iri2l rikl rill ri22 rik2 fil2 'i2 n rikn riln
m

B=Ao R=Ao

Alo Rl A20 R2 Arno

Rm

=(b b2' bn)

P

(9)

C.

In the evaluation, using the maximum membership degree principle, namely, bk =max(b"b2,"',bn) .Then, the comprehensive evaluation of the project level is k-grade [7]. IV. CASE STUDY Set a wind power company for the object, and assessment the risk of its wind power. Select 20 experts with good representative, by those members judging the weights at all levels, comparing the importance of the four indicators which include natural disaster risk (A 1), technology risk (A 2), economic risks (A 3), policy risks (A 4), obtain the following comparison matrix:
TABLE
v

3) Calculate the results of comprehensive evaluation.

=l 4) , Lr. , " (i=12 lJ

j=1

SINGLE-LEVEL COMPARISON MAXTRIX

Al A2 A3 A4

(6) After considering the weight receives a single-level fuzzy evaluation model:

Rj

(aj"aj2,,ajk)

['il 'i'ilnn 'ikl I

'i21 : 2 'ikn
(7)

Al A2 A3 A4

1 3 3 2

1/3 1 112 114

113 2 1 2

1/2 4 112 1

Standardization of the matrix is:

Note that" "is a fuzzy operator, in this paper selected the weighted sum-type operator.
0

W=

0.3333 0.4800 0.3333 0.2400 0.2222 0.1200

0.1111 0.1600

0.0625 0.0833

0.3750 0.6667 0.1875 0.0833 0.3750 0.1667

2) The Multi-level fuzzy comprehensive evaluation. Regard-less of the number of levels, the highest level of the general requirements of the target level evaluation results. Single-level fuzzy comprehensive evaluation is only the lowest

Added to the matrix by row is:

513

wi-

1.8550

0.4169 0.8442 0.8839

A]= (0.75,0.25), R ]= 0

After the standardization Wi can obtain the requirement eigenvector:

W 0.1042 0.4638

Then B]=A]0 R ]=(0.75,0.25)0

- 0 [

0 0

0 0

0.8 0.8 0 0

0.2 0 0.2

]
0.2 0.2

B2=A2o R 2= (0, 0, 0.36, 0.52, 0.12)

= (0, 0, 0, 0.8, 0.2) Similarly, can get vector of technical risk assessment: Vector of economic risk assessment: Risk assessment policy vector:

0.8

0.8

= 0.2110 0.2230

B3= A30 R 3 = (0, 0, 0.365, 0.515, and 0.12) B4= o R 4= (0, 0, 0, 0.855, and 0.145) Obtained from the above the B 1, B 2, B 3, B 4, get R = (B ], B 2, B 3, B 4) T According to the formula B = A. 0 R = (0, 0, 0.2439, 0.6239,0.1322) According to program evaluation criteria, bk = max (b1, b2, b3, b4, b5) = b4 = 0.6239, according to the principle of maximum membership degree can determine the overall level risk of the project for the fourth grade, that risk is small. V. CONCLUSION Wind Power Project has some risk of investment behavior. This paper conducts fuzzy comprehensive evaluation method, and uses the model to a wind power project; provide a reliable basis for the wind power project risk assessment to. In practice, the index system needs further added, and the indicator data processing and weight calculation methods may also have more choices, should be based on the actual situation of the wind power project to determine the meet their needs comprehensive risk evaluation index system and method.
REFERENCES [I] [2] [3] Liping Jiang. Review on Global Wind Power Development in 2008. China, Vol. 21, ppI2-15, No. 2, 2009. Bo Zhao,Chaofeng Jia. Risk Analysis and Management of Wind Power Project. CHINA INSURANCE, pp.47-49, July, 2007. Long Qin and Xiping Chen. Risk Assessment and Application. Risk
Electric Power Technologic Economics, Assessment and Application, China Public Security. Academy Edition, CCSS Tenth Anniversary Conference

Then, calculated the maximum eigenvalue of matrix is: Amax = 4.2976

Consistency Test: CI = (Amax-n) / n = (4.2976-4) / 4 = 0.0744. Since n = 4, R.1. = 0.89 .So, C.R. = C.1. / R.1. = 0.0836 <0.1. Then, can judge the weight is useful. According to the above method, comprehensive views of the experts, the final weight are determined as follows: A = (0.1042, 0.4638, 0.2210, 0.2230) Al = (0.75, 0.25) A 2 = (0.5, 0.3, 0.2) A 3 = (0.3, 0.25, 0.2, 0.25) A 4 = (0.3, 0.4, 0.3)

Determining the single factor membership. Select 20 experts with good representative who score each single factor of the wind power project. Then calculating the detailed evaluation, and get a membership degree of each factor is:

- 0 [
R , =

R]

= 0

0 0

0 0

0.8

l
0 0 0

0 0 0

0.6 0.2 0 0

0.8

0.2 0.2

]
a 0.15 0.2 0

0.4

R3 = 0

0 0 0 0

0.7

0.6

0.7 0 0 0

0.1

0.85 0.7 0.3

0.3

a 2

Based on fuzzy comprehensive evaluation formulaB=AoR, conduct fuzzy comprehensive evaluation, the fuzzy evaluation results are as follows: Vector of natural disaster risk assessment.

0 0 0

0.8

0.85 0.9 0.8

0.1

0.15 02. 0.1

0.1

Papers, Vo1.16 pp.110-112, Sept. 2009 No.3. Huan Tang. Risk Analysis and Assessment of Wind Power. Master's [4] thesis, North China Electric Power University, 2009. [5] Yan Zhao. To Assessing on Technology Risk in Venture Capital Project. China: Value Engineering, No. 12,2008, ppI53-l55. [6] Wei Zhang. Based on Fuzzy Comprehensive Evaluation Method in Urban Capability Assessment. Electric Power Science and Engineering, April ,China, vol. 4, pp.70-73,2009. [7] Jinpeng Feng. Analysis on Index System and Method of Compositive Estimation of Feasibility of Wind Power Project. Master's thesis, North China Electric Power University, China, 2008.

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