Multi-Faceted Analysis of Systematic Risk-Based Wind Energy Investment Decisions in E7 Economies Using Modified Hybrid Modeling with IT2 Fuzzy Sets

Dejun Qiu, Hasan Dinçer, Serhat Yüksel and Gözde Gülseven Ubay
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Dejun Qiu: Learning Achievement Certification Centre, Jilin Radio and TV University, Changchun 130022, China
Hasan Dinçer: School of Business, Istanbul Medipol University, Kavacık South Campus, 34810 Istanbul, Turkey
Serhat Yüksel: School of Business, Istanbul Medipol University, Kavacık South Campus, 34810 Istanbul, Turkey
Gözde Gülseven Ubay: School of Business, Istanbul Medipol University, Kavacık South Campus, 34810 Istanbul, Turkey

Energies, 2020, vol. 13, issue 6, 1-25

Abstract: This study aimed to analyze the systematic risks of wind energy investments. Within this framework, E7 countries are included in the scope of the examination. A large literature review was carried out and 12 different systematic risk factors that could exist in wind energy investments were identified. The analysis process of the study consisted of two different stages. First, the specified risk criteria were weighted with the help of the interval type 2 (IT2) fuzzy decision-making trial and evaluation laboratory (DEMATEL) method. Second, E7 countries were ranked according to the risk management effectiveness in wind energy investments. In this process, the IT2 fuzzy Vlsekriterijumska Optimizacija I Kompromisno Resenje (VIKOR) approach was taken into consideration. The findings show that volatility in exchange rates and interest rates were the most important risks in wind energy investments. In addition, it was determined that China and Indonesia were the most successful countries in managing risks in wind energy investments. In contrast, India, Russia, and Turkey were determined to be the least successful. Additionally, the IT2 fuzzy technique for order preference by similarity to ideal solution (TOPSIS) method was applied as a robustness check of the extended VIKOR method. It was concluded that the ranking results of the IT2 fuzzy TOPSIS method were similar to the results of the IT2 fuzzy VIKOR. It can be understood that the proposed ranking method was consistent with the comparative analysis results. From this point of view, it was observed that countries should take measures regarding their exchange rate and interest rate risks in order to increase the efficiency in wind energy investments. In this context, companies should first ensure that they do not have a foreign exchange short position in their balance sheets by conducting an effective financial analysis. In addition, it is important to use financial derivatives to minimize the exchange rate and interest rate risks. Using these results, it will be possible to manage this risk by taking the reverse position for the existing foreign currency and interest risk. In this way, it will be possible to increase the efficiency of wind energy investments, which will contribute to the social and economic development of each respective country.

Keywords: wind energy; investment decision; IT2 fuzzy DEMATEL; IT2 fuzzy VIKOR; IT2 fuzzy TOPSIS (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

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