A holistic risk management framework for renewable energy investments

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dc.contributor.authorAbba, Yahajja Zara Ibrahim
dc.contributor.authorBalta-Ozkan, Nazmiye
dc.contributor.authorHart, Phil
dc.date.accessioned2022-03-13T20:38:40Z
dc.date.available2022-03-13T20:38:40Z
dc.date.issued2022-03-04
dc.description.abstractPrivate investments are critical enablers to achieving energy access for over 770 million people worldwide. Despite decreasing capital costs, investments in renewable energy (RE) projects in developing countries are low due to unattractive risk-return profiles. Through understanding key risks drivers and their interactions, actionable insights can be drawn to mitigate investment risks, making energy more accessible. This paper reviews RE risks and methods used for risk assessment and mitigation for developed and developing countries with a focus on Sub-Saharan Africa countries (SSA). The review finds that while risk analysis and evaluation mainly employed semi-quantitative multicriteria decision analysis (MCDA) and system dynamics (SD) methods for developing countries, qualitative methods were used to identify mitigations. The methods assessed technical and economic risks at a minimum, while MCDA and SD methods can assess social, political, and policy risks. The efficacies of mitigations were tested using SD and quantitative methods such as agent-based modelling and Monte Carlo simulation. The paper further introduces a ‘holistic multi-dimensional investor risk management framework’ which can be used to identify actions to improve investment risks in a structured manner. The framework addresses four fundamental limitations observed in the existing literature, recognising that RE risks are complex and involve multidisciplinary perspectives having interactions and feedbacks with other risks, actors, and their actions. This review provides a valuable reference to investors, policymakers, and researchers, providing a catalogue of risks, methods deployed in literature, including a framework to identify impactful actions to improve risk levels.en_UK
dc.identifier.citationAbba ZY, Balta-Ozkan N, Hart P. (2022) A holistic risk management framework for renewable energy investments, Renewable and Sustainable Energy Reviews, Volume 160, May 2022, Article number 112305en_UK
dc.identifier.issn1364-0321
dc.identifier.urihttps://doi.org/10.1016/j.rser.2022.112305
dc.identifier.urihttp://dspace.lib.cranfield.ac.uk/handle/1826/17651
dc.language.isoenen_UK
dc.publisherElsevieren_UK
dc.rightsAttribution 4.0 International*
dc.rights.urihttp://creativecommons.org/licenses/by/4.0/*
dc.subjectRenewable energy investment risksen_UK
dc.subjectRenewable energy risk assessment methodsen_UK
dc.subjectMulticriteria decision analysisen_UK
dc.subjectSystem dynamicsen_UK
dc.subjectAgent-based modellingen_UK
dc.subjectMonte Carlo simulationen_UK
dc.subjectDeveloping countriesen_UK
dc.subjectSub-sahara africa countriesen_UK
dc.subjectHolistic risk management frameworken_UK
dc.subjectAnalytical hierarchy processen_UK
dc.subjectAnalytical network processen_UK
dc.titleA holistic risk management framework for renewable energy investmentsen_UK
dc.typeArticleen_UK

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