Decision making on energy options using type-2 fuzzy relation: A case study

Major decisions are made without advance knowledge of their consequences including decision on energy options. In spite of the best efforts initiated in the development of renewable energy resources, it is too early to visualize that the ever increasing gap between supply and demand of energy, for peaceful purposes, should be bridged in the near future. A mix of low carbon sources, including nuclear energy and renewable energy, while limiting greenhouse gases is considered a viable solution with less/no computations. In this paper, a brief write up on Prospect Theory proposed by Professor Kahneman in decision research is presented. Due to shortage of knowledge or information about the future scenes, risks are rather fuzzy. Computing with words, proposed by Prof. Lotfi A. Zadeh, the father of fuzzy logic could be a useful armamentarium in this quest. Further, an illustrative example describing decision-making for the energy prospects (options) under risk is presented by using type-2 fuzzy relations - a subset of Computing with Words. At last, the country should construct more plants installations based on the final ranking, is discussed using “reference point” concept of prospect theory.