Decision Factors for Renewable Energy Projects Approval

PhD Dissertation Subject: Renewable Energy Projects
©Copyright Koorosh R. Satvati, January, 2016 Page 1 of 321
Decision-Making Factors that Lead to
Prioritisation and Approval of
Renewable Energy Projects
The Multiple Case Study of the Renewable Energy Projects in IRAN
A DISSERTATION
By
Koorosh Razavi Satvati
Submitted to SKEMA Business School, Lille
In partial fulfilment for the requirements for the degree of
Doctor of Philosophy in Strategy, Programme and Project Management
Scientific Research Director:
Pr. Rodney J. Turner (SKEMA Business School)
Supervisors:
1. Pr. Hiroshi Tanaka (SKEMA Business School: Main Supervisor)
2. Dr. Mehran Azaran (SKEMA Business School: Co-Supervisor)
January 2016

ABSTRACT
This research study has been construed as a qualitative case study on a recent developing
movement in Iran to increase the supply and diversified usage of renewable energy resources as
against traditional fossil sources to meet the required energy demand, by taking the case of Iranian
nautral gas sector. In this context, it attempts to scientifically find the essential decision-making
aspects and factors that lead to prioritisation and approval of the renewable energy projects and
thereafter, to analytically sort them according to their perceived degrees of assumedly positive and
negative impacts. Furthermore, it seeks to propose appropriate recommendations for the strategic
action planning activities executed by the top managers as principal decision-makers of the
targeted energy, particularly natural gas companies.
The study has objectively investigated the current state of renewable energy resources and
nationwide utilisation programmes in Iran in order to find key opportunities and action plans for
renewable energy deployment improvement as a guide for promoting a more positive and
optimum decision-making process. Hence, the findings from this research study can be reflected
as a contribution to the existing relevant body of knowledge and concept.
The research has confirmed that there is a substantial relationship between decision-makers’
perceptions or visions towards implementing renewable energy projects and their final decisions.
The literature review in this study has identified forty six factors founded on nineteen decision-
making aspects. They have been rated on their impact through a questionnaire survey responded
by the energy managers or senior experts working in the Iranian natural gas refineries and related
administrative centres/departments in Iran as the first case study.
The second case study on Renewable Energy Organisation of Iran (SUNA) by means of
interviews into responsible managers/experts has led to a list of proposed strategic
recommendations and action plans.

According to the research findings, consolidation of the required infrastructure for the promotion
of positive utilisation of renewables with respect to legal and regulatory, system structural,
technological, cultural, financial, industrial, and political aspects has the highest priority as a
strategic programme towards the expected achievement.
Key Words: Renewable Energy, Project, Decision Making, Natural Gas Processing Company (Natural
Gas Treating Company, Natural Gas Refinery), Renewable Energy Organisation of Iran
(SUNA)

DECLARATION OF AUTHORSHIP / ORIGINALITY
I certify that this thesis, “Decision-Making Factors that Lead to Prioritisation and Approval
of Renewable Energy Projects: Multiple Case Study of the Renewable Energy Projects in
IRAN”, has not previously been submitted for any degree, nor has it been submitted as a part of
requirements for any degree in another university.
I also certify that it has been written and prepared by me. Any help that I have received in my
research work has been acknowledged. In addition, all sources and literature used have been
indicated in this dissertation.
Koorosh R. Satvati

DEDICATION
To my father _his great spirit_;
whose memory always inspires me the value of education and the desire towards enlightenment.
To my kind mother;
whose concern and attention always cause me the feeling of vigor and contentment.
To my kind father-in-law and mother-in-law _her newly passed away kind soul_;
whose support and attention always bring me mental comfort and advancement.
In particular, to my beloved spouse;
Roshanak
whose influencing help, persuasion, encouragement and kind companion always direct me to
continual improvement.
And finally, to my two dear sons;
Kian and Aryan
for whom, I wish all the best and happiness throughout their beautiful lives.

ACKNOWLEDGEMENTS
Looking back to the whole journey of my PhD, even before starting and while wishing on my
mind; I wish to express my most sincere gratitude and deepest thanks to everyone who supported
me along the way. It is not possible to mention all their names here, but I wish the best for all of
them.
I admire all efforts conducted by Professor Rodney J. Turner and other splendid SKEMA faculty
members. I appreciate the entire lessons-learned during training-courses which were lectured by
great professors, professionals and friends/colleagues during the seminars e.g. EDEN within the
past five years. In addition, my special thanks should go to other honorable SKEMA directors
and/or managers for their strategic and outstanding activities towards continual improvement and
evolution in all multi-directional related areas. Besides, I appreciate from the kind and careful
programme administrators who supported me very well.
Finally and notably, I am deeply grateful to my great supervisors; Professor Hiroshi Tanaka and
Doctor Mehran Azaran whose fabulous and invaluable feedbacks and guidance gave me
applicable insights for incredible and astonishing progress.
I think all PhD students usually experience some degree of turbulence and/or changes in the
environment surrounding them, fluctuations and uncertainties during their PhD studying career. It
was the same to me, as well. However, attending at the main compulsory courses and some optional
ones scheduled for the PhD programme in SKEMA business school; Lille, France and also the
doctoral EDEN international seminars be held annually there, caused many marvelous ideas being
ignited in me to realize how to start and walk along my thesis journey.

TABLE OF CONTENTS
TITLE PAGE ----------------------------------------------------------------------------------------------- 1
ABSTRACT ------------------------------------------------------------------------------------------------- 2
DECLARATION OF AUTHORSHIP / ORIGINALITY --------------------------------------------- 4
DEDICATION ---------------------------------------------------------------------------------------------- 5
ACKNOWLEDGEMENTS ------------------------------------------------------------------------------- 6
TABLE OF CONTENTS ---------------------------------------------------------------------------------- 7
LIST OF FIGURES --------------------------------------------------------------------------------------- 12
LIST OF TABLES ---------------------------------------------------------------------------------------- 15
LIST OF ABBREVIATIONS --------------------------------------------------------------------------- 16
CHAPTER 1: INTRODUCTION -------------------------------------------------------------------- 20
1-1: Preface ------------------------------------------------------------------------------------------------ 20
1-2: Background ------------------------------------------------------------------------------------------ 21
1-2-1: Statement of the Problem ----------------------------------------------------------------------------- 22
1-2-2: Research Questions ------------------------------------------------------------------------------------ 22
1-2-3: Propositions --------------------------------------------------------------------------------------------- 23
1-2-4: Business Issue to Be Addressed ---------------------------------------------------------------------- 24
1-2-5: How will resolving of the current problem help the targeted organisations? ------------------- 25
1-3: Aim and Objectives --------------------------------------------------------------------------------- 25
1-3-1: Research Aim ------------------------------------------------------------------------------------------- 25
1-3-2: Research Objectives ----------------------------------------------------------------------------------- 26
CHAPTER 2: LITERATURE REVIEW ---------------------------------------------------------- 27
2-1: (A) Decision Making; (B) Project, Programme and Portfolio Management --------------- 27
2-1-1: Decision Making --------------------------------------------------------------------------------------- 27
2-1-2: Decision Making Theories ---------------------------------------------------------------------------- 28
2-1-2-1: Agency Theory ------------------------------------------------------------------------------------------- 30
2-1-2-2: Bandit Theory -------------------------------------------------------------------------------------------- 30
2-1-2-3: Open System Decision Making ------------------------------------------------------------------------ 31
2-1-2-4: Financial Appraisal profile ----------------------------------------------------------------------------- 31
2-1-2-5: Expected Commercial Value Method ----------------------------------------------------------------- 32

2-1-2-6: Benefit/Cost Ratio and Profitability Index ------------------------------------------------------------ 32
2-1-2-7: Bubble Diagrams for Project Mapping ----------------------------------------------------------------- 33
2-1-2-8: Prospect Theory ------------------------------------------------------------------------------------------- 34
2-1-2-9: Normative Decision Theory ----------------------------------------------------------------------------- 34
2-1-2-10: Behavioral Decision Theory --------------------------------------------------------------------------- 35
2-1-2-11: Decision Theory ----------------------------------------------------------------------------------------- 35
2-1-2-12: Probability Theory -------------------------------------------------------------------------------------- 36
2-1-2-13: Expected Utility Theory -------------------------------------------------------------------------------- 36
2-1-2-14: Group Decision Making -------------------------------------------------------------------------------- 36
2-1-2-15: Bureaucratic Model ------------------------------------------------------------------------------------- 37
2-1-2-16: Equilibrium-Conflict Resolution Theory ------------------------------------------------------------- 37
2-1-2-17: Analytical Hierarchy Process -------------------------------------------------------------------------- 38
2-1-3: Project, Programme and Portfolio -------------------------------------------------------------------- 39
2-1-3-1: Project ------------------------------------------------------------------------------------------------------ 40
2-1-3-2: Programme ------------------------------------------------------------------------------------------------- 40
2-1-3-3: Portfolio ---------------------------------------------------------------------------------------------------- 40
2-1-3-4: Portfolio Management ------------------------------------------------------------------------------------ 41
2-1-3-5: Project, Programme, and Portfolio Management Office --------------------------------------------- 41
2-1-4: The Organisational View of Projects ----------------------------------------------------------------- 41
2-1-5: Failure Causes in Decision Making and Projects --------------------------------------------------- 45
2-2: Energy ------------------------------------------------------------------------------------------------- 47
2-2-1: General Subjects and their Brief Explanations ------------------------------------------------------- 47
2-2-1-1: Energy, Units and Conversion Factors ----------------------------------------------------------- 48
2-2-1-2: Renewable Energy -------------------------------------------------------------------------------- 50
2-2-1-3: Solar Energy -------------------------------------------------------------------------------------- 51
2-2-1-4: Wind Energy -------------------------------------------------------------------------------------- 52
2-2-1-5: Geothermal Energy ------------------------------------------------------------------------------- 53
2-2-1-6: Biomass Energy ----------------------------------------------------------------------------------- 54
2-2-1-7: Bio-Fuels ------------------------------------------------------------------------------------------ 54
2-2-1-8: Hydro-Power -------------------------------------------------------------------------------------- 54
2-2-1-9: Wave Power, Tidal Power and Ocean Currents -------------------------------------------------- 55
2-2-1-10: Nuclear Energy ---------------------------------------------------------------------------------- 55
2-2-1-11: Natural Gas (NG) -------------------------------------------------------------------------------- 55
2-2-1-12: Coal ---------------------------------------------------------------------------------------------- 56
2-2-1-13: Geographic Information System (GIS) --------------------------------------------------------- 57
2-2-1-14: Primary and Secondary Energy Commodities -------------------------------------------------- 57
2-2-1-15: Waste -------------------------------------------------------------------------------------------- 58
2-2-1-16: Carbon Dioxide (CO2) -------------------------------------------------------------------------- 58
2-2-1-17: Greenhouse Gases (GHGs) --------------------------------------------------------------------- 59
2-2-1-18: Global Climate Change ------------------------------------------------------------------------- 59

2-2-1-19: Energy Portfolio --------------------------------------------------------------------------------- 59
2-2-1-20: Energy Technologies ---------------------------------------------------------------------------- 60
2-2-1-21: Conventional Power ----------------------------------------------------------------------------- 60
2-2-1-22: Green Technology ------------------------------------------------------------------------------- 60
2-2-1-23: Combined Heat and Power (CHP) -------------------------------------------------------------- 60
2-2-1-24: Distributed Generation -------------------------------------------------------------------------- 61
2-2-1-25: Renewable Portfolio Standard (RPS) ----------------------------------------------------------- 61
2-2-1-26: Renewables Energy Certificate (REC) --------------------------------------------------------- 61
2-2-1-27: IEA (The International Energy Agency) and OECD (The Organisation for Economic Co-operation and
Development) ----------------------------------------------------------------------------------- 62
2-2-1-28: IRENA (The International Renewable Energy Agency) --------------------------------------- 62
2-2-2: Global Energy Demand, Consumption and Some Economic Statistics toward More Renewables ------------
------------------------------------------------------------------------------------------------------------- 62
2-2-3: Energy Condition and Some Statistics in Iran ------------------------------------------------------- 68
2-2-4: Energy Modeling ---------------------------------------------------------------------------------------- 75
2-2-5: Sustainability and Renewable Energy ---------------------------------------------------------------- 75
2-2-6: Commercialization of Renewable Energy Technologies ------------------------------------------ 76
2-2-7: Decision Support Systems in the Pathway of Renewable Energies Use ------------------------- 79
2-2-8: Renewable Energy Project Development Process -------------------------------------------------- 79
2-2-9: Global Solar and Wind Atlas -------------------------------------------------------------------------- 81
2-2-10: Converting of Renewable Energies into Electric Power ----------------------------------------- 82
CHAPTER 3: RESEARCH METHODOLOGY -------------------------------------------------- 88
3-1: Research Paradigm ---------------------------------------------------------------------------------- 89
3-2: Research Philosophy--------------------------------------------------------------------------------- 91
3-3: Ontology and Epistemology------------------------------------------------------------------------ 91
3-4: Research Approach---------------------------------------------------------------------------------- 93
3-4-1: Research Design ---------------------------------------------------------------------------------------- 95
3-4-2: Main Steps and Milestones of the Present Research Design ---------------------------------- 95
3-4-3: Chain of Evidence -------------------------------------------------------------------------------------- 96
3-5: Philosophical Research Strategy ----------------------------------------------------------------- 101
3-6: Research Methods---------------------------------------------------------------------------------- 103
3-6-1: Questionnaire and Interview ------------------------------------------------------------------------- 103
3-6-2: Case Study ---------------------------------------------------------------------------------------------- 104

3-6-2-1: The Position of Case-based Research --------------------------------------------------------------- 105
3-6-2-2: Rigor in Case Study Research ------------------------------------------------------------------------ 106
3-6-3: Summary ----------------------------------------------------------------------------------------------- 109
3-7: Data Collecting Methods ------------------------------------------------------------------------- 111
3-7-1: Gathering Decision Making Aspects/Factors for Prioritisation and Approval of Renewable Energy Projects ----------
---------------------------------------------------------------------------------------------------------- 112
3-7-2: Case-Study One: Natural Gas Processing Companies in Iran ---------------------------------- 112
3-7-3: Case-Study Two: Iran Renewable Energy Organisation (SUNA) ----------------------------- 115
CHAPTER 4: DATA COLLECTIONS AND FINDINGS ------------------------------------ 119
4-1: Decision Making Aspects/Factors for Prioritisation and Approval of Renewable Energy Projects ------
------------------------------------------------------------------------------------------------------ 119
4-1-1: Step One- Adopting Items from Each Reference Reviewed ---------------------------------- 119
4-1-2: Step Two- Merging the 270 Adopted Items to Produce the Final List ---------------------- 135
4-1-3: Step Three- The Final List of Decision Making Factors/Aspects ------------------------------ 166
4-2: Gathered Data from Questionnaires and Sorted Aspects/Factors based on Their Degrees of Perceived
Influence ------------------------------------------------------------------------------------------ 169
4-3: Gathered Data from Interviews and Categorized Answers to Each Question ------------ 181
4-3-1: Interview Question 1, Answers and Proposed Actions to be taken ---------------------------- 182
4-3-2: Interview Question 2, Answers and Proposed Actions to be taken ---------------------------- 198
4-3-3: Combined Proposed Actions to be taken relevant to Interview Questions 1 and 2----------- 209
4-3-4: Interview Question 3, Answers and Analysis ----------------------------------------------------- 211
CHAPTER 5: DISCUSSIONS AND RESULTS ------------------------------------------------ 223
5-1: Propositions, Discussions and Results ---------------------------------------------------------- 223
5-1-1: Investigations and Discussions about each Proposition ------------------------------------------ 227
5-1-1-1: Proposition 1 ----------------------------------------------------------------------------------- 227
5-1-1-2: Proposition 2 ----------------------------------------------------------------------------------- 228
5-1-1-3: Proposition 3 ----------------------------------------------------------------------------------- 229
5-1-1-4: Proposition 4 ----------------------------------------------------------------------------------- 230
5-1-1-5: Proposition 5 ----------------------------------------------------------------------------------- 231
5-1-1-6: Proposition 6 ----------------------------------------------------------------------------------- 233
5-1-1-7: Proposition 7 ----------------------------------------------------------------------------------- 234

5-1-1-8: Proposition 8 ----------------------------------------------------------------------------------- 235
5-1-1-9: Proposition 9 ----------------------------------------------------------------------------------- 237
5-1-1-10: Proposition 10 -------------------------------------------------------------------------------- 240
5-2: Strategic Recommendations and Proposed Action Plans ------------------------------------ 241
CHAPTER 6: CONCLUSION ---------------------------------------------------------------------- 242
6-1: Conclusion ------------------------------------------------------------------------------------------ 242
6-2: Limitations ------------------------------------------------------------------------------------------ 247
CHAPTER 7: RECOMMENDATIONS FOR FUTURE INVESTIGATIONS ----------- 249
CHAPTER 8: REFERENCES ---------------------------------------------------------------------- 250
8-1: Reference List ------------------------------------------------------------------------------------- 250
8-2: Categorized Reference Lists --------------------------------------------------------------------- 273
8-2-1: References according to the Type ------------------------------------------------------------------ 274
8-2-2: References in Chronological Order ---------------------------------------------------------------- 279
APPENDIX-1: The Literature Review Coding Matrix and Table ------------------------------ 282
APPENDIX-2: Bi-Lingual Request Letter Sent to the Respondents --------------------------- 283
APPENDIX-3: Bi-Lingual Invitation Package for Completing the Questionnaire ----------- 285
APPENDIX-4: Bi-Lingual Questionnaire ---------------------------------------------------------- 293
APPENDIX-5: Interview Questions and Interviewees’ Views and Answers ----------------- 294

LIST OF FIGURES
Figure 2-0001: Risk-Reward Bubble Diagram of Company T. ………………………….………... 34
Figure 2-0002: A Three Level Analytical Hierarchy Process (AHP) …………………………...…. 38
Figure 2-0003: Analytical Hierarchy Process (AHP) Flow Chart …………………………………. 39
Figure 2-0004: A Project-Oriented Organisation in its Context …………...………….…………… 42
Figure 2-0005: Projects, Programmes and Portfolios in an Organisation ……..…………………… 43
Figure 2-0006: The Technical and Socio-Cultural Dimensions of Project Management …..……… 44
Figure 2-0007: Solar PV Atlas, Solar power in Harmony with Nature ………….………………… 52
Figure 2-0008: A Wind Farm Shutting Down and then Restarting due to a Period of High Wind Speed
…………………………………………………………………………………………. 53
Figure 2-0009: Generalized Natural Gas Processing Block Flow Diagram ………...…………...… 56
Figure 2-0010: Terminology for Energy Commodities …………………….……………………… 58
Figure 2-0011: Estimated Renewable Energy Share of Global Final Energy Consumption, 2012 ... 64
Figure 2-0012: Electricity Demand and Share of Electricity …………………………………..…… 65
Figure 2-0013: World Renewables Share of Power Generation by Region ……..…..……………… 66
Figure 2-0014: Renewable Energy Cost Trends ……..…………..……………….………………… 66
Figure 2-0015: Clean Energy Investments Depending on Oil Prices ……..……….………….……. 67
Figure 2-0016: Cumulative Global Energy Supply Investment by Type in the New Policies Scenario,
2014-2035 ……………………………………..……………..………………………… 68
Figure 2-0017: Iran Oil and Gas Map ……………..……………………...………………………… 70
Figure 2-0018: World Primary Energy Consumption in 2013 per capita …………………………… 71
Figure 2-0019: Energy Flow in Iran in 2006 ……………………………………..…….…………… 72
Figure 2-0020: Energy Flow in Iran in 2012 ………………………………………………..…….… 72
Figure 2-0021: Policy Maps _ Countries with Renewable Energy Policies, 2005 ……..…………… 74
Figure 2-0022: Policy Maps _ Countries with Renewable Energy Policies, Early 2014 …....……… 74
Figure 2-0023: Technology Triangulation Model for Technology Commercialization ……..……… 77
Figure 2-0024: Renewable Energy Project Development Process …………………..……………… 80
Figure 2-0025: Use of Resource Data in Project Development …………………..………………… 80

Figure 2-0026: Bi-Directional Power Flows May Result from the Use of Dispersed Electricity Generation
Technologies, particularly Time-Varying Renewable Energy Generation ….………... 82
Figure 2-0027: Underground Storage of Electricity from Photovoltaic Farms in the Form of Compressed
Air in the U.S.A. ………………………………………………………….…………… 84
Figure 2-0028: Cost of Electricity Generation in the MENA Region ……………………………… 84
Figure 2-0029: Levelized Cost of New Power Generation Technologies in 2008 ….……………… 86
Figure 3-0001: Main Steps and Milestones of the Present Research Design in an Overall View ..… 95
Figure 3-0002: Chain of Evidence in this Research – Overall View …………..………....………… 98
Figure 3-0003: Chain of Evidence in this Research – The Relationships between Research Questions and
Propositions …………..……….…………………………………………………..…… 99
Figure 3-0004: Chain of Evidence in this Research – The Relationships between Interview Questions and
Propositions …………..……….…………………………………..……..…………… 100
Figure 3-0005: Exploration-Description-Explanation-Testing Cycle ……….….……………….… 107
Figure 3-0006: Research Strategy ……………………………………………….….………..….… 110
Figure 3-0007: Iran Renewable Energy Organisation Main Office in Tehran .…………..…..…… 115
Figure 4-0001: The Force-Yield View of the Decision-Making Aspects that Lead to Prioritisation and
Approval of Renewable Energy Projects …………………………..……………..….. 168
Figure 4-0002: The Force-Yield View of the Decision-Making Factors that Lead to Prioritisation and
Approval of Renewable Energy Projects ……………………..…………………..….. 175
Figure 4-0003: Total Results Chart: Mean of Evaluated Scores given to the Decision-Making Factors
(both Positive and Negative) in a descending order ……..……………..…………….. 177
Figure 4-0004: Total Results Chart: Median of Evaluated Scores given to the Decision-Making Factors
(both Positive and Negative) ……………………..……………………………….….. 178
Figure 4-0005: Decision-Making Factors with Positive Impacts in a descending order ……..…… 179
Figure 4-0006: Decision-Making Factors with Negative Impacts in a descending order ….……… 180
Figure 5-0001: Relationships between Propositions and Decision-Making Factors/Answers to Interview
Questions………………………………………………………………….…..……… 224
Figure 5-0002: Relationships between Propositions and Decision-Making Factors ………….….. 225
Figure 5-0003: Relationships between Propositions and Answers to Interview Questions …….... 226

Figure 5-0004: Theoretical Framework for Proposition-9 _ Relationships among R.Q.’s,
Improbable/Probable Status and Outcomes ………………………………………... 238
Figure 6-0001: What Has Been Done in this Research based on AHP (Analytical Hierarchy Process)
Decision-Making Theory …………………………………………………………... 243
Figure 8-0001: Number of Each Reference Type in a descending order (Pie-Chart) ……..….…. 275
Figure 8-0002: Number of Each Reference Type in a descending order (Column-Chart) ….…... 276
Figure 8-0003: Percentage of Each Reference Type in a descending order (Pie-Chart) ……...… 277
Figure 8-0004: Percentage of Each Reference Type in a descending order (Column-Chart) ....... 278
Figure 8-0005: Number of References in Chronological Order (Column-Chart) ………….….... 280
Figure 8-0006: Number of References in Chronological Order (Pie-Chart) ……….………….... 281

LIST OF TABLES
Table 2-0001: Project, Programme and Portfolio – Main Issues and Differences ………....…..….. 41
Table 2-0002: Energy Units Conversion Factors …...………………………..…………..…….….. 50
Table 2-0003: Relevant Data to Be Considered for Integration into the Atlas in the Long-Term .... 81
Table 2-0004: Cost Calculation of Electricity from Various Sources …...………………..……….. 85
Table 3-0001: Advantages and Disadvantages of Interviews and Questionnaires ……………….. 103
Table 3-0002: Framework for Research Methods …………………………………….………….. 105
Table 3-0003: Natural Gas Processing Companies (Refineries) of Iran ..........…………….…….. 114
Table 4-0001: Calculation of the mean of the ratings for each positive factor .......………..…….. 170
Table 4-0002: Calculation of the mean of the ratings for each negative factor .......……….…….. 171
Table 4-0003: Interviewees of SUNA Managers and Specialists .......……………………..…….. 181

LIST OF ABBREVIATIONS in alphabetical order
1 A: Amperes (amps) RMS
2 AC: Alternating Current
3 AEO: Annual Energy Outlook
4 AEO2013: Annual Energy Outlook 2013
5 AEO2014: Annual Energy Outlook 2014
6 AHP: Analytic Hierarchy Process
7 B.G.P.C.: Bidboland Gas Processing Company
8 bbl: barrels
9 BOCR: Benefits, Opportunities, Costs and Risks
10 BOD: Biological Oxygen Demand
11 CAPM: Capital Asset Pricing Model
12 CCS: Carbon-dioxide Capture and Storage
13 CDM: Clean Development Mechanism
14 CEF: Clean Energy Fund
15 CER: Certified Emission Reductions
16 CHP: Combined Heat and Power (Plant)
17 CNG: Compressed Natural Gas
18 CO: Carbon monOxide
19 CO2: Carbon Dioxide
20 COD: Chemical Oxygen Demand
21 CPI: Climate Policy Initiative
22 CPV: Concentrator photovoltaic
23 CREST: Cost of Renewable Energy Spreadsheet Tool
24 CREX: Global Corporate Renewable Energy Index
25 CSR: Corporate Social Responsibility
26 CT: Combustion Turbine
27 CT: Current Transformer
28 DC: Direct Current
29 DG: Distributed Generation
30 DOE: U.S. Department of Energy
31 DSM: Demand-Side Management
32 DSS: Decision Support System
33 ECV: Expected Commercial Value
34 EFCA: European Federation of Engineering Consultancy Associations
35 EfD: Education for Sustainability
36 EFPS: Energy Efficiency Portfolio Standard
37 EIA: Environmental Impact Assessment
38 EPA: U.S.A. Environmental Protection Agency
39 EPM: Enterprise Project Management
40 ES: Earned Schedule
41 ESD: Ecologically Sustainable Development
42 ESD: Education for Sustainable Development

43 EUMENA: Europe, the Middle East and North Africa
44 EV: Earned Value
45 EVM: Earned Value Management
46 F.G.P.C.: Fajr-e-Jam Gas Processing Company
47 FANP: Fuzzy Analytic Network Process
48 FAP: Financial Appraisal Profile
49
FIDIC: Federation Internationale des Ingenieurs Conseils (French)
[International Federation of Consulting Engineers]
50 FIT: Feed in Tariffs
51 GAO: Government Accontability Office of USA
52 GDP: Gross Domestic Product
53 GEF: Global Environment Facility
54 GHG: greenhouse gas
55 GIS: Geographic Information System
56 GJ: GigaJoule, or one joule x 109 (see joule)
57 GMDP: Good Market Development Policy
58 GNP: Gross National Products
59 GW: Gigawatts
60 GWEC: Global Wind Energy Counsil
61 GWEO: Global Wind Energy Outlook
62 HDM: Hierarchical Decision Model
63 HVDC: High Voltage Direct Current
64 I.G.P.C.: Ilam Gas Processing Company
65 IDM: Integrated Decision Making
66 IEA: International Energy Agency
67 IPCC: Intergovernmental Panel on Climate Change
68 IRENA: International Renewable Energy Agency
69 IRR: Internal Rate of Return
70 IRR: Iranian Rial [Iranian National Currency]
71 IS: Information System
72 ISES: International Solar Energy Society
73 ISM: Interpretive Structural Modeling
74 J: joule
75 JDM: Judgemental Decision-Making
76 kWh: killowatt/hour, or one watt x one hour x 103
77 LNG: Liquefied Natural Gas
78
LPG: Liquefied Petroleum Gases; refers to propane, butane and their isomers, which are
gases at atmospheric pressure and normal temperature
79 M.S.G.P.C.: Masjed-Soleiman Gas Processing Company
80 MB: Market Barriers
81 MBtu: million British termal units
82 MCDM: Multiple Criteria Decision Model
83 MENA: The Middle East and North Africa
84 Mm3
: million cubic meters
85 MMbbl/d: Million Barrels per Day

86 MNC: Multinational Corporations
87 MS: Masters of Science
88 MT: Market Transformation
89 Mtoe: Million tons of oil equivalent
90 MW: MegaWatt, or one watt x 106
91 N.I.G.C.: National Iranian Gas Company
92 N: Negative
93 NGL: Natural Gas Liquids
94 Nm3
: Normal cubic meter
95 NOx: Nitrogen Oxides
96 NPV: Net Present Value
97 O&M: Operations and Maintenance
98 OB: Organisational Behavior
99 OECD: Organisation for Economic Cooperation and Development
100 OM: Operations Management
101 OPEC: Organisation of the Petroleum Exporting Countries
102 OR/MS: Operations Research/ Management Science
103 P.G.P.C.: Parsian Gas Processing Company
104 P: Positive
105 P: Real (active) Power
106 PBP: PayBack Period
107 PERT: Project Evaluation and Review Technique
108 PhD: Philosophy of Doctorate
109 PPM: Project Portfolio Management
110 PPP: Project Portfolio Process
111 PPP: Project, Programme and Portfolio
112 Pr.: Proposition
113 PV: PhotoVoltaic
114 Q.G.P.C.: Sarkhoon-o-Qeshm Gas Processing Company
115 R & D : Research and Development
116 R: Reference
117 RAI: Return on Average Investment
118 RD & D : Research, Development and Deployment
119 RE: Renewable Energy
120 REC: Renewable Energy Credit/s
121 RES: Renewable Energy Source/s
122 RET: Renewable Energy Technologies
123 ROI : Return On Investments
124 RPS: Renewable Portfolio Standards
125 RQ : Research Questions
126
S.G.P.C.: Shahid-Hashemi_Nezhad Gas Processing Company (i.e. Khangiran Gas
Treating Plant)
127 S.P.G.C.: South Pars Gas Complex
128 SEA: Strategic Environmental Assessment

129 SLV: San Luis Valley
130 SWERA: The Solar, Wind and Energy Resource Assessment
131 TA: Technology Assessment
132 TAP: Technology Action Plan(s)
133 TOC: Goldratt's Theory of Constraints
134 toe: ton of oil equivalent
135 UNIDO: United Nations Industrial Development Organisation
136 US EIA: United States Energy Information Administration
137 VA: Voluntary Agreement(S)
138 W: Watts

CHAPTER 1: INTRODUCTION
1-1: Preface
The nations are being faced with the growing demand for energy resources and as the result, so
many challenges and/or disasters have been created due to the supply of this developing
requirement. Therefore, man is obliged to have appropriate strategies and proper action plans for a
reasonable and sustainable life style at the moment, and reserve at least anything necessary to the
next generations for the mankind as well as all creatures. Because, they are absolutely inter-
connected.
Many companies are under terrific pressure and surveillance to achieve their operational
excellence in order to take maximized benefit out of their resources in a responsible and
conscientious manner. Decision-making factors; which help to constitute explicit scenarios, can
be applied to optimize relevant business and professional processes and in this way, bring control
to the overwhelming amount of information that drives the organisation. In addition, corporate
governance usually mandates that the workforce has the correct direction and the latest
information to perform more efficiently satisfying fundamental performance requirements such as
safety, consistency and compliance with the defined goals and objectives in the company by
implementing and executing the strategic actions.
In general, energy cost is one of the outstanding expenses or a large proportion of total costs in
the financial balance of each energy consumer in industrial and/or non-industrial centres. Hence,
managers pay particular attention to driving them down. Energy consumers are usually divided
into the producers, the business companies, the households, the vehicles and so on. Traditionally,
the consumers have supplied their energy demand with fossil energy resources, because of their
tangible experience of accessibility, availability and reliability in terms of both utilization
technology and user-friendly characteristics as resources; this experience has formed a significant
motive force. On the contrary, in modern energy management strategies, this motive force is

turning out to take on a different aspect. The contemporary policy-makers consider that the
renewable energies are more accessible, available and reliable; and at top of all, they believe that
these resources have an important characteristic called; "ease of operations". They also emphasize
that the reliability will be increased drastically if renewable energy resources are used in hybrid
forms.
Foggy environment, non-clarity and insufficient knowledge concerning renewable energy usage
in parallel to the lack of optimized decision-making mechanisms have yielded primary reasons for
neglecting these important and never-ending resources while defining or revising the energy
management policies and strategies for the consumers. One of the necessary managerial attempts
in this field i.e. the probable first stage is known as the identification of the relevant decision-
making factors. The next step can be the exploration of their inter-relationships bearing in mind
their influential importance or weight percentages to generate the whole perceptive mechanism.
The final step can be the generation of the scenario(s) for better decisions made by any company's
top management to cope with this challenge.
Watching through the technological, economic, and political aspects, Taylor (2012) argues that
‘there is a complex interplay between technological and economic factors influencing the
deployment of renewable technologies, the relative cost of generating energy from different
sources, and the broader political and economic cycles.’
1-2: Background
This section has been divided into five sub-sections as follow:
1-2-1: Statement of the problem
1-2-2: Research questions
1-2-3: Propositions
1-2-4: Business issue to be addressed
1-2-5: How will resolving of the current problem help the targeted organisations?

1-2-1: Statement of the Problem
The researcher’s literature review and unstructured ethnographical observations while working as
an energy specialist, consultant and/or manager in some industrial companies such as
petrochemical complexes and natural gas refineries in Iran has led him to the formation of the
following problem to be researched on the foundation of a doctoral thesis:
The Problem: There is no evident strategic recommendations, i.e. motive force1
to define,
prioritise, and approve the implementation of energy projects using the
renewable energy resources in industrial companies e.g. natural gas refineries
in Iran.
(1
Motive force = logic, algorithm, desire, emergency, motivation, legislation and/or even legal obligation)
1-2-2: Research Questions
1. What are the essential decision-making aspects/factors affecting prioritisation and
approval of renewable energy projects?
2. How can these essential decision-making aspects/factors which are categorized mainly
into two types: one with assumedly positive impacts and the other with negative impacts
be sorted based on their degrees of perceived influence?
3. What are the strategic recommendations for the strategic action planning activities
executed by top managers as principal decision-makers of the targeted companies?
1-2-3: Propositions
Proposition 1 (Pr.-1): Fear of negative impact on stability and continuity of production as a result
of implementing renewable energy projects is the hardest hurdle for decision
makers to take a positive attitude toward renewable energy.

Proposition 2 (Pr.-2): Implementation experience in other companies plays a highly important role
to raise the perceptional confidence or assurance in the decision making
process.
Proposition 3 (Pr.-3): Being able to recognize which type of renewable energy is usable can be a
significant contributing factor to facilitate the decision making process.
Proposition 4 (Pr.-4): Historical experience record on energy efficiency promotion on the ground
of lower energy consumption and/or higher energy harvest influences on the
prioritisation and approval of renewable energy projects.
Proposition 5 (Pr.-5): Improvement in financial and economic parameters such as revenue, benefit
amount, and investment savings can have extensive impact upon making
decisions for including renewable energy projects in portfolio.
Proposition 6 (Pr.-6): Predicted time required to produce outcomes, positive influence, and life
expectancy of renewable energy recovery are amongst highest priorities in
decision making activities.
Proposition 7 (Pr.-7): Necessity for great changes in current production systems can impact the
psychology of decision makers in their Prioritisation and approval.
Proposition 8 (Pr.-8): Improvement of public knowledge and awareness pertaining to the
advantages of renewable energy resources can impact favorably the decision
making.
Proposition 9 (Pr.-9): A significant relationship is assumed to exist between decision-makers’
perceptions or visions towards implementing renewable energy projects and
their final decisions.

Proposition 10 (Pr.-10): Nationwide promotion of practical uses and optimum utilization of
renewable energy can be taken into place more successfully by
governmental companies in comparison to private sector companies.
1-2-4: Business Issue to Be Addressed
Iranian energy consumers have been categorized into the following three main sections:
1. Industrial Centres e.g. Complexes and Factories
2. Residential, Business and Trading Centres
3. Transports
They have the opportunity to revise their energy-usage strategies and performance in a way that
the fossil resources are replaced by the renewable or green energies partially or completely
founded on a mixed or hybrid form. Moreover, the energy consumers may adopt an effective
energy policy based on sustainability features.
For instance, one of the largest power generation plants in India; called Tata, has a policy in
energy management which can be well thought-out as a highly useful perspective adapted with
the aim of the current research or dissertation topic. Tata declares that ‘the corporate sustainability
integrates (1)
economic progress; (2)
social responsibility; (3)
environmental concerns; with the
objective of improving the quality of life for all stakeholders, now and for generations to come.
They view it as an opportunity to make a difference and remain committed to the issues of (A)
resource conservation; (B)
energy efficiency; (C)
environment protection; and (D)
enrichment and
development of local communities in and around their areas of operations. In their drive towards
clean environment, they are trying to set standards in the development and implementation of
cutting edge eco-friendly technologies and processes for energy management. They are working
with policy-makers and regulators to; (1)
advance technology; (2)
strengthen the renewable energy

portfolio; (3)
accelerate the development of cost effective energy efficiency programmes; and (4)
manage consumers' demand for electricity.’ They state that “Sustainability is a journey, not a
destination.” (Tata’s Energy Management Policy, 2012)
1-2-5: How will resolving of the current problem help the targeted organisations?
In fact, there is a “MUST” for all people and organisations. This “MUST” has resulted from the
social responsibility for keeping or maintaining fossil energy resources as an invaluable property
for next generations, the environmental responsibility for less carbon emission or moving towards
clean development mechanism (CDM) policy, and wisely strategic management of switching
from fossils into renewable energy resources before reaching to almost end or very highly
expensive development of fossil resources due to their shortage as discussed previously.
The resulted outcome of this research is recommending strategic recommendations for policy-
making processes.
1-3: Aim and Objectives
1-3-1: Research Aim
This research is to find decision-making aspects/factors and propose the strategic
recommendations which can be applied by the energy manager or energy management department
of the targeted companies for convincing, persuading or even leading the decision-makers to
perform more efficiently in the process of prioritisation and approval of renewable energy
projects in project portfolio of their corresponding companies.

1-3-2: Research Objectives
The objectives of this research are as follow:
1. Exploring, gathering, evaluating and integrating existent literature on the essential
decision-making aspects/factors that would affect the process of prioritisation and
approval of renewable energy projects of the targeted companies;
2. Proposing strategic recommendations founded on the decision-making aspects/factors;
3. Analysing and validating the proposed strategic recommendations with regard to the
experiences, insights or practical and professional perceptions of the energy managers
and senior specialists who are currently responsible for renewable energy management;
4. Finalizing the strategic recommendations as an inductive enquiry resulted from
scientific thinking and investigating offered to the targeted companies

CHAPTER 2: LITERATURE REVIEW
2-1: (A) Decision Making; (B) Project, Programme and Portfolio
2-1-1: Decision Making
“Decision-Making” in managerial activities is defined as the process of choosing a specific
alternative for execution in parallel to the “evaluation” process conveying a quantitative value to
each associated alternative or by providing information which illuminates properties of each
alternative. (Nutt, 1976) Whereas, Stefanovic M. and I. (2005) introduce the “decision-making”
as a kind of judgement under conditions of uncertainty. They continue that the process stands up
on the basis of knowledge from earlier experience grounded on our unconscious sensation which
is sufficient for most decisions that are simple. On the other hand, with growing ambiguity and/or
an increasing number of independent variables, decisions become more difficult and our natural
conclusions become less reliable. At that situation, we require reliable procedures and
mechanisms to support us for making more intelligent choices between different subjects.
(Stefanovic M. and I., 2005)
Through another insight, Jaques argues about the reverse nature of decision making process as an
obligation for decision makers if they encounter only facts. In other words, in a realistic
condition, there will be no alternatives to be chosen. Instead, the environment itself dictates how
to be followed and decisions will be made spontaneously or naturally by themselves. “If you have
made a decision that was entirely based on factual information, you have not made a decision; it
was made for you by the facts.” (Dr. Elliott Jaques) (Stefanovic M. and I., 2005)

2-1-2: Decision Making Theories
In this section, according to the degree of relevance to the current research which provide more
features of concern or applicability, a number of decision making theories and models have been
reviewed.
As an introductory explanation, two extremes of decision making theories in the broad spectrum
of the organisational behavior are introduced which have been proposed for value-maximizing by
Mukerji (2011) namely; “classical decision theory” and “garbage can theory”. All other
decision making theories can be considered to exist somewhere between these two extremes. The
“classical decision theory” outlooks to the specialist as acting in a world of comprehensive
certainty. In this circumstance, one encounters an undoubtedly distinct problem, knows all
probable accomplishing substitutes and their consequences, and at that moment selects the choice
which proposes the best solution of the problem. Nonetheless, perceptive restrictions can frustrate
experts’ skills to comprehend the all-inclusive domain of complex problem dimensions,
consequently decisions are possibly to be made with inadequate information. In contrast, the
“garbage can theory” deals with organised syndromes as being categorized by: 1- awkward or
unreliable and imprecise preferences or objectives; 2- uncertain technology process based on trial-
and-error techniques and the deposit of lessons-learned from previously accidents; and 3-
unsolidified involvement where contributors differ in the extent of dedicated time and effort to
altered areas. Being on the opposite side of “classical decision theory” as a sensible decision
making, “garbage can theorists” have defined it as a process characterised by structural anarchy.
(Mukerji, 2011)
According to these two definitions, whereas the renewable energy projects are kind of
construction projects in which there are lots of uncertainties, no specified aspects, no apparent
factors, related consequences and so on, therefore the entity of decision making process
appropriate for this research lies very close to the extreme of the “garbage can theory”.

Although supporters of the decision making models often undertake that a specific model should
be used for most, if not all, decision making activities (Nutt, 1976), the researcher believes that
the decision making process can be well-thought-out as a multi-aspect phenomenon with several
angles of view or perspectives. Hence, more familiarity and knowledge about the prevailing
theories and models can be beneficial for empowering and authorizing the final results obtained
from the decision making group in any enterprise. Therefore, a descriptive list of the reviewed
theories in an ascending-relevant order to this research supplemented by brief explanations for
each has been followed:
(1) ‘Agency Theory’ (Meyer, 2013) (not applicable to this research)
(2) ‘Bandit Theory’ (Meyer, 2013) (not applicable to this research)
(3) ‘Open System Decision Making’ (Nutt, 1976) (not valid and applicable to the essence of this research)
(4) ‘Financial Appraisal Profile’ (Le and Nguyen, 2007) (less applicable to the principle of this research)
(5) ‘Expected Commercial Value Method’ (Le and Nguyen, 2007) (less applicable to the core of this research)
(6) ‘Benefit/Cost Ratio and Profitability Index’ (Le and Nguyen, 2007) (applicable in following steps of this
research i.e. in the connected future investigations)
(7) ‘Bubble Diagrams for Project Mapping’ (Le and Nguyen, 2007) (applicable in following steps of this
research i.e. in the associated future surveys while selection process among the portfolio is to be done)
(8) ‘Prospect Theory’ (Meyer, 2013) (low applicability to this research)
(9) ‘Normative Decision Theory’ (Nutt, 1976) (correlated to the subject of this research)
(10) ‘Behavioral Decision Theory’ (Nutt, 1976) (adhered to the subject of this research)
(11) ‘Decision Theory’ (Meyer, 2013) (almost applicable to this research)
(12) ‘Probability Theory’ (Meyer, 2013) (definitely applicable to this research)
(13) ‘Expected Utility Theory’ (Meyer, 2013) (undeniably and subjectively relevant to this research)
(14) ‘Group Decision-Making’ (Nutt, 1976; Meyer, 2013) (100% applicable to and meaningful for this research)
(15) ‘Bureaucratic Model’ (Nutt, 1976) (applicable and expressive to this research)
(16) ‘Equilibrium-Conflict Resolution’ (Nutt, 1976) (definitely matched to the essence of this research)
(17) ‘Analytical Hierarchy Process’ (Polatidis, Haralambopoulos, et al., 2006; Le and Nguyen, 2007; Daim, et al., 2010; Sue
Men, 2011; Kang, et al., 2011; Theodorou, et al., 2011) (the best appropriate and the most perfect model for configuring
the whole body of this research on)

2-1-2-1: Agency Theory
‘Agency theory designates the connection between a principal who represents a mission and an
agent who is responsible for accomplishment of the duty commanded by the mission. The
contract types between the principal and the agent are either outcome-based or behavior-based.
This theory can describe the approach in which a decision maker will react when confronted with
a decision, whereas may affect the organisation negatively but beneficial to the individual.’
(Meyer, 2013) In the current research, the problem which is seeked to be solved i.e. some accepted
model is to be proposed for improvement in managerial decision making in the environment in
which using the renewable energy resources are being encouraged, there is no prior made decision
so far that can affect the following decision making processes. As a result, this theory is not
applicable to this research.
2-1-2-2: Bandit Theory
‘Bandit theory refers to circumstances where a single decision maker selects a project from a
fixed set of alternatives. Projects are supposed to be liberated from other projects and the project
which is selected in a timeframe produces a certain advantage from a constant distribution. The
distribution and benefits of projects do not change over time, however the decision maker’s
beliefs about the projects and benefits do change.’ (Meyer, 2013; originally, Banks & Sundaram,
1992) In the natural gas processing companies, normally the decisions are going into the line for
analysing by the top managing team via the decision builders or suggesting teams and in fact, the
top managerial group finally reach to the point of decision making end. Moreover, most - even
nearly all - projects have something in common with other implementing or previously
implemented projects. In other words, it is almost never that a single or independent project be
found in the portfolio. Consequently, this theory cannot be applicable to this research.

2-1-2-3: Open System Decision Making
‘In this type of decision making model, decision tasks are too complicated for comprehending
because some linked vital variables cannot be understood or even defined but only forecast. The
complex nature of the variables is because of; 1- the definitional necessities are overwhelming; 2-
the essential information can be very costly and challenging to obtain; 3- the criteria are difficult
to be agreed for assessments; and 4- the open essence of most interesting decision tasks requires
attention to many parameters and their interactions where no behavioral or normative theory
exists to propose cause and effect relationships among them. Moreover, no objectives are fixed
and decisions are not expected to match with any agreed configuration, principal strategy, or set
of internally stable rationality.’ (Nutt, 1976) According to this description argued by Nutt, this
model is not valid and applicable to the essence of this research.
2-1-2-4: Financial Appraisal Profile
‘Lefley (2000) presented the refined Financial Appraisal Profile (FAP) model with an
illustration of a case study applying this model. This model consisting of three sub-models: the
net present value profile (NPVP), the project risk profile (PRP), and the strategic index (SI) is
capable of evaluating three main features of capital projects: finance, risk and strategic benefits.’
(Le and Nguyen, 2007)
According to the definition and description argued by Le and Nguyen, the financial appraisal
profile model is fundamentally used for detailed financial analysis. Although, financial factors are
among the final factor-list generated through the literature review done for this research, more in-
depth analysis is not to be executed in this area at this phase. Therefore, this model is less
applicable to the principle of the current research.

2-1-2-5: Expected Commercial Value Method
‘Cooper et al. (1997a, 2001a) noted that Expected Commercial Value Method (ECV) known as
a decision tree method is utilized to maximize the expected value of the portfolio, and added that
it conquers over the weakness of the net present value and reports for low-grade methods which
fail to consider risks, probability of technical and commercial success. The expected commercial
value methed profoundly combines these three concepts with the strategic approach in decision
making process.’ (Le and Nguyen, 2007)
Although the parameters pertinent to ECV are conceptually mentioned in the final factor-list
generated through the literature reviewed for this research, more comprehensive analysis is not
necessary for the existing study. Hence, this model seems less applicable to the core of this
research.
2-1-2-6: Benefit/Cost Ratio and Profitability Index
‘Frame (1994) discussed the analysis of weighting benefits of an option against its costs, which is
known as Benefit/Cost (B/C) Analysis. The ratio is calculated by dividing the estimates of
benefits by the estimates of costs as illustrated in the formula below:
B / C = (Estimated Sales * Estimated Profit Rate * Probability of Success) / Estimated Costs
The benefit/cost ratio or profitability index is a quantitative tool which is very useful for
ranking or prioritising projects. When the ratio is greater than 1.0, a project is profitable and
accepted; when it is less than 1.0, the project is unprofitable and rejected; and when it is equal to
0, the project is accepted or rejected depending on consideration of other strategic factors as
benefits offset costs.’ (Le and Nguyen, 2007)
Indeed, this index can be applied when the primary decision for implementing a project has been
made in advance. However, the problem is that as the current research seeks (a) reasonable
solution(s) or proposition(s) it is judged that the decision process is not still sufficiently

developed. Therefore, this model may be applied in later steps of this research i.e. in its connected
future investigations.
2-1-2-7: Bubble Diagrams for Project Mapping
‘According to Cooper et al. (2001), developed bubble diagrams for project mapping are mainly
based on the concepts of BCG matrix as portfolio management and GE/McKinsey matrix as
portfolio analysis, and used to present project portfolio for resource allocation. A typical diagram
has two dimensions and four segments to visually locate projects for creation of a balance
portfolio. One dimension of this diagram shows the interest in qualitative and quantitative
analysis of project earnings and benefits as future rewards whereas another one is associated with
consideration of uncertainty and risk. The bubble or circle represents projects and their size
denotes the resource amount allocated to each project. When adding or deleting the new projects,
resources strategically considered to share among projects make the size of the bubble or circle
change as the total sum of the areas of the circles must be a constant. Below is an example of the
risk-reward diagram of Company T.’ (Le and Nguyen, 2007)
Figure 2-0001: Risk-Reward Bubble Diagram of Company T. (Source: Le and Nguyen, 2007; Originally;
Cooper, et al., 2001a)

This project mapping tool can be applied in later steps of this research i.e. in the associated future
surveys while selection process among the portfolio is to be done.
2-1-2-8: Prospect Theory
‘Prospect theory explains the way in which we make decisions based on the principle that we
evaluate the magnitude of the move from our current position when making decisions. In
addition, we are also more likely to be risk averse when we stand to gain something and more risk
seeking when stand to lose something. Prospect theory argues that people do not behave in
standard economic ways.’ (Meyer, 2013) Actually, the perception of the risk affect on the decision
making in the ground of the current research is not so noticeable. Therefore, the applicability of
this theory to the subject is almost low.
2-1-2-9: Normative Decision Theory
‘Normative Decision Theory (NDT) can be characterized by its search for certainty in decision
making and its assumption that goals are known and information concerning the decision task can
be provided; in which there are a set of alternatives (Ai); a mutually exclusive and exhaustive set
of states of nature (Si); the probability (Pi) that each state will occur; a matrix of utilities for each
Si Ai intersection, which depicts the decision makers' utility if alternative Ai is implemented in an
environment described by Si; and a set of criteria X to judge the intrinsic value of Ai.’ (Nutt,
1976) This model can be used for the conditions in which far-reaching or thorough study is
required for more improved and reliable decision making process. In this regard, this theory
seems correlated to the subject of this research.

2-1-2-10: Behavioral Decision Theory
‘Simon pinpointed some of the limitations of “Normative Decision Theory” as a generic decision
model and proposed that a “decision space” (a sub-matrix of AiSi) in the normative decision
theory model should be defined to make NDT workable. Before the search for Aj's begins, one
defines “acceptable” states of nature and seeks alternatives that fall in these states. Since
acceptable, not optimal, alternatives are sought, a “satisficing” decision rule is used. If these
“acceptable” alternatives are easy to find, Simon postulates that the decision maker's aspiration
level rises; if not, aspiration level falls, and the decision maker may redefine what is “acceptable”.
Thus, recognizing “behavioral” principles in decision making makes the decision task somewhat
more manageable.’ (Nutt, 1976) Whereas the normative decision theory seems interconnected to
the current study, therefore, this model as a corresponding theory can be adhered to the subject of
this research in the area of decision making process.
2-1-2-11: Decision Theory
‘It deals with the way in which decisions are made typically under uncertainty. The decision-
making process has multiple processes, which could be visited multiple times, depending on the
type of decision and the factors influencing the decision maker.’ (Meyer, 2013; Originally;
Mintzberg, Raisinghani, & Théorêt, 1976; Simon, 1960 and Gilboa, 2009) This theory is almost
applicable to the current research, because there exist some uncertainties and ambiguities for
Prioritisation and approval of renewable energy projects in the case studied situation.
2-1-2-12: Probability Theory
‘It is essential to our understanding of the choices available to decision makers and explaining
their behavior when given certain consequences and probabilities. The actual behavior of a
decision maker can be compared to the decision options and the ideal economic behavior. People

indirectly consider probabilities in every decision they make, nonetheless they do not compute
precisely the probabilities. Their perceptions of probability are significantly influenced by factors
such as stress, prior experiences, optimism, and so on.’ (Meyer, 2013)
This theory is definitely applicable to the current research. Actually, there are few implemented
renewable projects in Iranian natural gas refineries. Therefore, it is so natural that the decision
makers potentially responsible and authorized for this matter have so many doubts and feel so
many probabilities in front of themselves while decision making process.
2-1-2-13: Expected Utility Theory
‘Expected Utility Theory (EUT) combines characteristics of probability theory, decision theory,
and economic benefit. EUT describes the benchmark performance that one would expect a
decision maker to reveal, in other words; taking decisions that give the best gain. EUT deals with
standard economic behavior based on the best calculated outcome or utility.’ (Meyer, 2013)
Certainly, economic aspect is generally a fundamental and important factor in each decision
making process. Therefore, this theory is undeniably and subjectively relevant to the current
research.
2-1-2-14: Group Decision Making
‘Group decision making investigates how groups of people deal with decisions that involve
input from all the members in the group.’ (Meyer, 2013) ‘Decision making through group
processes is frequently proposed by “human relations” advocates as a decision mechanism.’
(Nutt, 1976)
As per mentioned previously, the decisions in the current studying case(s) have been made by the
top managing group. Therefore, this theory is 100% applicable to and meaningful for this
research.

2-1-2-15: Bureaucratic Model
‘In the bureaucratic model, decision making is conducted by people with both power and
competence who interpret master plans. These master plans provide rules and procedures
governing contingencies, performance expectations and individual behavior for important
decision tasks. This model can be used when organisations have stable products or services and
when the costs of development of master plans can be amortized. Moreover, organisations and
components of organisations profitably use the bureaucratic model when the decision
environment is largely routine or predictable.’ (Nutt, 1976)
Considering the existing environment in the cases studied in this research, this theory is
applicable to and expressive for this research.
2-1-2-16: Equilibrium-Conflict Resolution Theory
‘In equilibrium-conflict resolution theory, the individual decision maker feels “conflict” when a
choice among alternatives is perceived to be “uncertain”, “unacceptable”, or “uncomparable”.
Few resources and high aspirations will intensify individual conflict. Conflict in groups can be
further emphasized by goal differences, schedule and resource dependencies, mismatches of
rewards and goals, few information sources with low communication among group members, and
imposing group decision-making requirements on a heretofore latent group. Time pressure acts on
both individuals and groups in organisations by limiting their duration of attention, which can
cause the adoption of narrow-minded alternatives.’ (Nutt, 1976)
According to the main problem which this research tries to propose some suggestions for its
solution, promotion or upward alertness i.e. Prioritisation and approval of the renewable energy
projects in Iran, the existence of conflicts and uncertainties are plausible. Therefore, this theory is
definitely matched to the essence of this research.

2-1-2-17: Analytical Hierarchy Process
‘Analytical Hierarchy Process (AHP) model developed by Saaty (1980) is used to support
decision makers to rationally select the best alternative based on the qualitative and quantitative
approach; subjective and pair-wise comparisons. The objective, evaluation criteria and sub-
criteria are set in a hierarchical structure for order ranking, alternatives or options comparison in
pairs, and selection of the best alternative.’ (Le and Nguyen, 2007) ‘It allows decision making
stemmed from both rational and intuitive method to select the best option from a number of
alternatives evaluated with respect to several criteria. AHP is selected widely for multi-criteria
decision making tool. As shown in the following figure, the simplest form used to structure a
decision problem is a hierarchy of three levels; the goal of the problem at the topmost level,
criteria at the second level and alternatives at the lowest level.’ (Sue Men, 2011)
Figure 2-0002: A Three Level Analytical Hierarchy Process (AHP) (Source: Sue Men, 2011)
In the following figure, Sue Men (2011) introduces a typical flow chart for analytical hierarchy
process (AHP):

Figure 2-0003: Analytical Hierarchy Process (AHP) Flow Chart (Source: Sue Men, 2011)
According to the above descriptions about the analytical hierarchy process, the researcher selected
this method as the most appropriate and compatible scheme for configuring relevant parts of this
research. On the ground of AHP, the analysing process of the final aspects/factors derived from
literature review was initiated. Subsequently, a questionnaire founded on ranking scale was
developed as secondary information to be followed and supported by interviews through a more
in-depth qualitative survey in the second case study.

2-1-3: Project, Programme and Portfolio
2-1-3-1: Project
‘Project is defined as a time and cost constrained operation to realize a set of defined deliverables
up to quality standards and requirements; i.e. a temporary endeavor undertaken to create a unique
product, service, or result.’ (Caupin, et al., 2006, Le and Nguyen, 2007; originally; PMI, 2006)
2-1-3-2: Programme
‘A programme consists of a set of related projects and required organisational changes to reach a
strategic goal and to achieve the defined business benefits.’ (Caupin, et al., 2006)
2-1-3-3: Portfolio
‘A portfolio is a set of projects and /or programmes, which are not necessarily related, brought
together for the sake of control, coordination and optimization of the portfolio in its totality. An
organisation can have several portfolios in existence at the same time.’ (Caupin, et al., 2006) PMI
(2006) defines “portfolio” as a collection of projects or programmes - whether interdependent or
not - and other work that are grouped together to facilitate the effective management of that work
to meet strategic business objectives.’ (Le and Nguyen, 2007)
Table 2-0001: Project, Programme and Portfolio – Main Issues and Differences (Source: Caupin, et al.,
2006)

2-1-3-4: Portfolio Management
‘Portfolio management is a permanent function in the line management organisation. The actual
projects and/or programmes in the portfolio will exist for a limited time, while the portfolio itself
remains.’ (Caupin, et al., 2006)
2-1-3-5: Project, Programme, and Portfolio Management Office
‘A project management office - or programme management or portfolio management office
- is part of a permanent organisation. Its roles are typically to provide support, to set standards and
guidelines for the managers of the different projects and programmes, to collect project
management data from the projects, to consolidate these and to report to some governing body. It
has to ensure that the projects are aligned to the organisation’s strategy and vision.’ (Caupin, et
al., 2006)
2-1-4: The Organisational View of Projects
‘Each organisation consists of both internal (e.g. top management structures and functional
departments) and external contexts (e.g. customers, regulators, partners, science, technology,
economy, legislation, society and the natural environment); in which there are always so many
interactions and interfaces between them. Nowadays, managing of the projects in a growing
complex environment and the organisation’s contexts is very challenging. The following figure
demonstrates a pattern of a project-oriented organisation.’ (International Project Management
Association [IPMA], 2013)

Figure 2-0004: A Project-Oriented Organisation in its Context (Source: International Project Management
Association [IPMA], 2013)
Mission, vision and strategy are three commonly and broadly used expressions in many
organisations. According to international project management association (IPMA, 2013),
“mission” expresses the ultimate purpose of an organisation, “vision” illuminates the
organisation’s future achievement, and “strategy” deals with the realization of the vision.
‘Projects are implemented in organisations to deliver desired yields with the purpose of meeting
the specifications and being on time and within planned budget. On the other hand, the
organisation’s top management is supposed to check whether the organisation’s mission, vision
and strategy are met in a sustainable way. In other words, both effectiveness i.e. “doing the right
projects” and efficiency i.e. “doing the projects right” are to be considered. As shown in the
following figure, the projects in an organisation could be managed either separately or as part(s)
of a programme. In addition, projects and programmes could be organised in portfolios and sub-
portfolios.’ (International Project Management Association [IPMA], 2013)

Figure 2-0005: Projects, Programmes and Portfolios in an Organisation (Source: International Project
Management Association [IPMA], 2013)
According to Kula (2013) as shown in the following figure, the project management has two
equivalent phases, namely; sociocultural and technical phases. Each classification contains several
conceptions. The organisations’ portfolios, sub-portfolios, programmes and projects i.e. missions
actually interact or deal with these two divisions. Consequently, the more completed the factors
grounded on each two i.e. strategy, the more successful the movements towards perfect decision
making process and desired results i.e. vision.
Figure 2-0006: The Technical and Socio-Cultural Dimensions of Project Management (Source: Kula,
2013)

Cable, et al. (2004) state that project portfolio management can be assumed of as having three
leading purposes: 1- portfolio value maximization, 2- balance within the portfolio, and 3- strategic
alignment. Woods (2012) holds that organisation’s resources are the backbone for successfully
implementating of projects and correspondingly, it is too essential that each team member’s
performance to be optimized. ‘Through another insight, in order to ascertain the feasibility of a
project, modern project management necessitates predicting techniques for cost, duration, and
performance of a project, not only under normal conditions, but also under external happenings
that might sharply modify the status quo. There are several potential risk sources in projects: acts
of nature, physical risks, financial and economical risks, political and environmental risks, design
risks, and job-site-related risks.’ (Palomo, et al., 2007). ‘Therefore, risk as an intrinsic feature of
every project is vital to be assessed and managed for successful project implementation. Some
risk assessment tools have been developed to facilitate identification of potential problems.’ (Huff
and Prybutok, 2008) ‘There are many different techniques in use today for the identification and
evaluation of risks. Given the stakes involved in today’s projects, such intuitive measures, based
solely on experience, are no longer adequate.’ (Gidel, et al., 2005)
Indeed, this research is on the platform where the required decisions are to be made whether the
renewable energy projects are to be implemented or not. Hence, it seems too premature to take the
risk assessment at this level for investigation. Although, due to the importance and relevance of
this subject with the projects, a thorough reviewed literature has been presented in this part of the
thesis.
2-1-5: Failure Causes in Decision Making and Projects
An astonishing outcome based on Nutt’s two decade studies on 356 decisions made in medium to
large American and Canadian organisations reveals that, “Surprising but true: Half the

decisions in organisations fail !” The main reasons for these failures are actually the reflections
from the managerial methods. ‘According to Nutt’s investigation, the failures responsibilities goes
back to managers who enforce answers from the personnel, bound the exploration for
substitutions, and command to accomplish their policies. On the contrary, managers who clearly
define the necessity for action at the beginning, establish objectives, perform a limitless search for
solutions, and select appropriate individuals to take part are supposed to be more successful.’
(Nutt, 1999).
Nutt’s investigation (1999) suggests three failure reasons in decisions:
1. Non-existing really contribution of the involved personnel in the organisation despite of
their awareness and ability for the tasks - statistically; contribution has been occurred in
twenty percent of the made decisions - i.e. “commonly known, but uncommonly
practiced”.
2. Taking “short cuts” under time pressure and acting based on sermons such as “Why invent
the wheel?” Nevertheless, regardless of these short-cuts, unpredictable troubles and delays
will be regularly created.
3. Existing “subtleties” on behalf of managers which cause the subordinates to take
defensive action instead of to try looking for answers. In other words, “energy is directed
away from finding answers to protecting their backs and their interests, as well.”
Nutt (1999) supplements six suggestions for improvement of managers’ chances of making
successful decisions as “tips on how to manage the decision-making effort” as follow:
1. Manage decision-making processes personally;
2. Search for understanding;
3. Establish the direction with an intervention and an objective;
4. Stress idea creation and implementation;

5. Identify more than one option;
6. Deal with barriers to action
Mukerji (2011) in his PhD thesis researched about how to improve decision making processes in
construction planning to reduce project failures. He states that “effective decision making
processes to support complex planning are accepted as key strategies for project success.” He lists
six common causes of project failures as follow: (Mukerji, 2011; Originally; PMBOK, 2004)
1. Inadequate planning of project human and other resources resulting in e.g. assigning of
under skilled managers and inappropriate staff, schedules forcing unachievable delivery
dates;
2. Lack of decision-making and coordination of resources and activities;
3. Lack of proactive decision-making for control over progress resulting in projects not
properly revealing exact status until too late;
4. Lack of coordination with interested parties including clients leading to quality problems;
5. Poor planning of project specifications, inadequate innovative ideas, mismatch of
expectations between the PM, project team managers, subcontractors, suppliers, and
client(s);
6. Poor communication of planning processes, and decisions
According to Caupin, et al. (2006), success is the eventual purpose of a project or programme
manager. They add the IPMA’s definitions of project success as “the appreciation by various
interested parties of project outcomes” which is more challenging than “to produce the project
deliverables within time and budget”.

2-2: Energy
2-2-1: General Subjects and their Brief Explanations
The noticeable terms or expressions which are commonly encountered in the pertinent
explanatory literature have been listed to harvest a general terminology section for the current
thesis as follow:
(1) Energy, Units and Conversion Factors
(2) Renewable Energy
(3) Solar Energy
(4) Wind Energy
(5) Geothermal Energy
(6) Biomass Energy
(7) Bio-Fuels
(8) Hydro-Power
(9) Wave Power, Tidal Power and Ocean Currents
(10) Nuclear Energy
(11) Natural Gas (NG)
(12) Coal
(13) Geographic Information System (GIS)
(14) Primary and Secondary Energy Commodities
(15) Waste
(16) Carbon Dioxide (CO2)
(17) Greenhouse Gases (GHGs)
(18) Global Climate Change
(19) Energy Portfolio
(20) Energy Technologies
(21) Conventional Power
(22) Green Technology

(23) Combined Heat and Power (CHP)
(24) Distributed Generation
(25) Renewable Portfolio Standards (RPSs)
(26) Renewable Energy Certificates (RECs)
(27) IEA (The International Energy Agency) and OECD (The Organisation for Economic Co-
operation and Development)
(28) IRENA (The International Renewable Energy Agency)
2-2-1-1: Energy, Units and Conversion Factors
‘The term “energy” is very familiar, nevertheless amazingly few people fully recognize its true
nature and in everyday speaking, this word is used inaccurately. It is often used incorrectly while
expressing inter-changeably with the words e.g. work, power, and fuel. Perhaps, physicists or
engineers state the best explanation about the “energy” by presenting a comprehensible
illustration. It is recognizable that to raise a weight with a mass of one kilogram through a
distance of one meter above the surface on which it was originally resting, someone or some
machine must have performed some “work”. This work represents the amount of energy which
is inserted into the object. Indeed, this example illustrates the foundation for the International
System (SI) unit of energy; “joule”, which is defined as; the work done when a force of one
newton (1N) acts on an object so that it moves one meter (1m) in the direction of the force. If
the “time” parameter for performing this work is to be considered, we come across to another
term; called “power”. Obviously, there is a reverse proportion between the time and the power.
More power leads to less time duration and vise versa. Consequently, power is the rate at which
work is performed, or on the other hand, the rate of producing or consuming energy. The SI unit
of power is watt (W). Therefore, a power of one watt is required for consuming one joule of
energy in one second.’ (Beggs, 2002)
‘Because of the small size of “joule” as the unit while expressing the demand or consumed
quantity of energy in reports and analyses, other energy units have become widely held to be

used. For example, “ton of coal equivalent” was used traditionally until the time of extensive
usage of petroleum as the dominant energy resource which substituted by the “ton of oil
equivalent (toe)” defined as 41.868 gigajoules.’ (Garnier, et al., 2005)
Commonly used units of energy:
(Reference: Beggs, C. (2002). Energy: Management, Supply and Conservation: 289)
1- Kilowatt-hour (kWh) is commonly used in the electricity supply industry and, to a lesser
extent, in the gas supply industry. It refers to the amount of energy consumed in one hour
by the operation of an appliance having a power rating of one kW. Therefore:
1 kWh = 3.6 * 106 joule
2- British thermal unit (Btu) is the old imperial unit of energy. It is still very much in use
and is particularly popular in the USA.
1 Btu = 1.0551 * 103 joule
3- Therme is a unit that originated in the gas supply industry. It is equivalent to 100,000 Btu.
1 therme = 1.0551 * 108 joule
4- Ton of oil equivalent (toe) is a unit of energy used in the oil industry.
1 toe = 4.1868 * 1010 joule
5- Barrel is another unit of energy used in the oil industry. There are 7.5 barrels in 1 toe.
1 barrel = 6 * 109 joule
6- Calorie is the most commonly used unit of energy in the food industry. It is in fact the
amount of heat required to raise 1 gram of water through 1 °C.
1 calorie = 4.1868 *103 joule

The conversion factors of some commonly used energy units in relevant technical and
professional literature have been summarized in the following table:
Table 2-0002: Energy Units Conversion Factors (Source: IEA, 2014)
2-2-1-2: Renewable Energy
‘Renewable energy is derived from natural processes that are replaced continually and known as
naturally occurring non-depletable sources of energy. There are various types of renewable
energy, deriving directly or indirectly from the sun, or from heat inside the planet earth. They are
the energy that are generated from solar, wind, geothermal, hydropower, tidal, wave and ocean
resources, solid biomass, bio-gas and liquid bio-fuels in order to produce electricity, gaseous and
liquid fuels, heat or a combination of these energy types.’ (Shabangu, 2002; IEA, 2005; Garnier,
et al., 2005; and Nordman, 2010) Nonetheless, some references exclude municipal solid waste
and landfill gas. (Bollinger, 2014) In contrary, some definitions include municipal solid waste as a
renewable resource. (Guide to Purchasing Green Power, 2010)
2-2-1-3: Solar Energy
‘Solar energy is used to produce directly electricity, to heat/boil water, and to heat/cool and light
buildings. Photovoltaic mechanisms receive the energy of sunlight and convert it into the
electricity and may sometimes be stored in special batteries. Alternatively, sunlight can be

concentrated by means of mirrors on water drums to produce the steam required for moving a
steam turbine to generate electricity.’ (Shabangu, 2002; Daim, et al., 2010, Originally;
Department of Energy, 2007e)
Figure 2-0007: Solar PV Atlas, Solar power in Harmony with Nature (Source: Archambault, 2013)
2-2-1-4: Wind Energy
‘Naturally occurring wind has the energy which may be used directly either in windmills to grind
grain or pump water; or in wind turbines to generate electricity to be connected to national grid or
to charge batteries. Great modern wind turbines work together in areas called “wind farms” to
produce electricity and small turbines are used to meet localised energy needs.’ (Shabangu, 2002)
‘Wind is actually one of the cheapest types of renewable energies, however the limitation remains
for appropriate location where existence of minimum required wind be reliable and probable.’
(Daim, et al., 2010, Originally; Department of Energy, 2008)

As shown in the following figure, the wind speed more than 25 m/s is not applicable to produce
power. Therefore, the wind speed is one important constraint for the current and available
technology.
Figure 2-0008: A Wind Farm Shutting Down and then Restarting due to a Period of High Wind Speed
(Original Source: Kay, et al., 2006; then, Source: Outhred, et al., 2007)
2-2-1-5: Geothermal Energy
‘Geothermal energy is obtained from the heat stored in hot water sources or rock in the Earth’s
crust. This type of renewable energy has minimum negative environmental impact, although its
technology is still expensive. This type of energy is used either to produce electricity directly
from natural geysers/hot water or to heat fluids through pumping towards heat exchangers e.g. to
boil water in order to produce steam for power generation.’ (Shabangu, 2002; Daim, et al., 2010,
Originally; Department of Energy, 2007b)

2-2-1-6: Biomass Energy
‘The energy stored in all organic material such as plants, trees and crops originating form the
sun’s energy through photosynthesis is called bioenergy or biomass energy. This energy is then
converted into applicable types of energy e.g. heat, electricity and liquid fuels. Biomass energy is
derived from plants, residues from agriculture or forestry, organic components in municipal solid
wastes (MSW), industrial wastes (IW), and may finally be in the form of landfill gas (biogas), as
well. Actually, this type of energy – essentially extracted from wood - is the first energy source
joined with human-being life through all history. However, if using trees as the energy source
continues unsustainably; i.e. no replanting or reforesting, this section of biomass energy cannot be
considered as renewable.’ (Herzog, et al., 2000; Shabangu, 2002)
2-2-1-7: Bio-Fuels
‘The liquid form converted from biomass is known as bio-fuel. There are two most common
types of bio-fuels called ethanol - produced from rich carbohydrate biomass such as maize; - and
biodiesel - made from vegetable oils, animal fats and algae-. Transportation is one of important
consumers of bio-fuels.’ (Shabangu, 2002)
2-2-1-8: Hydro-Power
‘The power of water movement under gravitational force is called “hydro-power” which is the
most popular form of renewable energy; having almost 47% of the total share whereas 29%; for
wind, 23%; for biomass and the remaining 1%; for the rest. For example, it used to drive water-
turbines in order to produce electricity. In this case, water is passed through channels or generally
collected behind dams so that the height is raised. The generated potential energy is applied for
turning special turbines through their blades. The cost of electricity generated from this

technology is relatively cheap, but depending upon the location with important restriction in
drought conditions. Biological impacts, recreational requirements of water supply, river flow and
geo-political concerns if the water supply being near to international borders are amongs
additional obligations.’ (Shabangu, 2002; Daim, et al., 2010, Originally; Department of Energy,
2007c; Al baek and Liebreich, 2012)
2-2-1-9: Wave Power, Tidal Power and Ocean Currents
‘Wave power, tidal power and ocean currents can be applied to turn turbines in order to create
electrical energy. These days, technologies using these power sources are being commercialized.’
(Shabangu, 2002)
2-2-1-10: Nuclear Energy
‘Any generated energy from a controlled atomic reaction is defined as nuclear energy. The
exothermic fission reaction is occurred inside the nuclear reactor i.e. special rods which are
submerged into a liquefied media such as water in order to absorb the produced heat. The
regularly used fissile-material is uranium of which the atoms are splitted and consequently, a
large quantity of heat is created. The heat boils the water, thereafter; steam is produced to be
transferred to steam turbines for power generation and so on. (Daim, et al., 2010, Originally;
Department of Energy, 2009)
2-2-1-11: Natural Gas (NG)
Nowadays, natural gas as an important energy supply is extracted from underground or offshore
resources. Tobin (2006) explains the fundamental mission of the natural gas industry so as to take
the well-head quality natural gas, separate it into its constituent parts i.e. its components, and

deliver pipeline quality natural gas mainly methane; CH4, into the nation's network or grid. The
following figure shows a generalized natural gas processing block flow diagram:
Figure 2-0009: Generalized Natural Gas Processing Block Flow Diagram
2-2-1-12: Coal
‘Burning coal harvested from mines is used in load-base or thermal generation plants in order to
produce steam required for power generation. Even though coal is considered to be one of the
least expensive fuels, its negative impact on environment creates filtering complications agaist air
emissions.’ (Daim, et al., 2010, Originally; Department of Energy, 2007a)

2-2-1-13: Geographic Information System (GIS)
‘Geographic information system (GIS) is an electronic geographical and spacial data-base,
digital model or software system which is applied to plan and deploy renewable energy
technologies, analyse, visualize, and synthesize enormous amounts of information e.g. biomass
production potentials, wind conditions, population and bird migration routes to help understand
real world interactions and support the relevant decision making processes.’ (Nordman, 2010;
Bio-Energy Knowledge Discovery Framework, 2011)
2-2-1-14: Primary and Secondary Energy Commodities
‘According to one kind of energy supplies or commodities categorizing, they are divided into two
parts; namely as “primary” and “secondary”. Primary commodities are either extracted or
captured directly from natural resources such as crude oil, hard coal, and natural gas. Whereas
secondary commodities are those either produced from primary commodities or transformed
from secondary energy, again. Based on this definition, electricity generated by burning fuel oil is
categorized as “secondary”. Other examples include petroleum products (secondary) from crude
oil (primary), coke-oven coke (secondary) from coking coal (primary), charcoal (secondary) from
fuel wood (primary), etc.’ (IEA, 2005 and Garnier, et al., 2005)

Figure 2-0010: Terminology for Energy Commodities (Sources: IEA, 2005 and Garnier, et al., 2005)
2-2-1-15: Waste
‘Waste is known as a kind of fuel involving many constituents coming from combustible
industrial, institutional, hospital and household wastes such as rubber, plastics, waste fossil oils
and so on. It is either solid or liquid in form, renewable or non-renewable, biodegradable or non-
biodegradable.’ (IEA, 2005; Garnier, et al., 2005)
2-2-1-16: Carbon Dioxide (CO2)
‘Carbon dioxide is one of the combustion products generated from fossil fuels having carbon as
the key element in their chemical compositions which has been deposited underground within
millions of years (CO2). It is the main gas contributing to the greenhouse effect. Although, its
production and absorbtion were naturally used to be in a balance; i.e. in an equilibrium status on
the Earth, recently human activities result in serious disturbance in the world. Global warming is
the greatest hurdle in this regard.’ (Guide to Purchasing Green Power, 2010)

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