UTILIZATION OF ANALYTICAL HIERARCHY PROCESS TO EVALUATE IMPROVEMENT OPTIONS FOR A LOCAL ENERGY SYSTEM

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1 UTILIZATION OF ANALYTICAL HIERARCHY PROCESS TO EVALUATE IMPROVEMENT OPTIONS FOR A LOCAL ENERGY SYSTEM N. Katsoulakos a, D. Damigos b, D. Kaliampakos c, a National Technical University of Athens, Metsovion Interdisciplinary Research Centre (MIRC) Metsovo 44200, Greece katsoulakos@metal.ntua.gr b National Technical University of Athens, Laboratory of Mining and Environmental Technology 9 Heroon Polytechneiou str., 15780, Zographou Campus, Greece damigos@metal.ntua.gr c National Technical University of Athens, Laboratory of Mining and Environmental Technology dkal@central.ntua.gr Abstract This paper presents the evaluation of energy strategies for covering thermal energy needs in Metsovo - a Greek mountainous town - by the use of multicriteria analysis. Mountainous settlements require high fuel quantities for their thermal needs, due to harsh weather conditions. The most common fuel used is diesel oil. Under the influence of the current economic crisis, diesel oil prices are rising and this makes mountain societies vulnerable to energy poverty. So, the introduction of practices, which will result in reducing the costs and the environmental impacts of the current thermal energy systems used by the households, becomes even more necessary. In the case of Metsovo, the utilization of the locally produced forest biomass, as well as energy saving measures can form the fundamentals of a new strategy. The improvement of a local energy system is a problem that should consider several conflicting objectives. So, it is quite suited to the use of multicriteria analysis. In this paper Analytical Hierarchy Process (AHP) has been utilized. Accurate subjective criteria weighting and the ability to handle both qualitative and quantitative criteria are the main advantages of AHP, which make it effective for energy planning problems. For upgrading the current status of Metsovo thermal energy system, several alternatives were formed. The alternatives were based on the biomass and energy saving potential of the area and were evaluated according to criteria, which included CO 2 emissions, particulate matter emissions, costs and benefits, technological parameters and social acceptance. The main conclusion of this study is that renewable energy can play a key role in supporting mountain communities against energy poverty. Moreover, clean energy technologies and high energy efficiency should not only be included in major projects, but also in everyday energy applications. 1

2 Introduction Mountains special significance for our planet has been widely recognized since 1992, when the UN, through Agenda 21, created an action plan for sustainable development that included specific reference to mountainous areas. Mountains cover 25% of the earth s surface, provide water for at least the half of the world s people, are global centers of biological, cultural and geological diversity and constitute great reserves of energy, minerals and other natural resources [1]. Due to particularly cold winters, thermal energy demand in mountain settlements is high, whereas moderate summers and therefore restricted use of cooling systems - retain low levels of electricity consumption [2]. Moreover, the renewable energy potential of high altitude areas is usually high, but insufficiently utilized. According to EUROMONTANA [3], mountainous areas can contribute to EU s effort to achieve the objectives, because of their high renewable energy and energy saving potential. Four key aims are set for mountainous areas, as far as energy is concerned: 1. High energy efficiency 2. Energy security through energy production from diverse local sources 3. Creation of capacity and networks that will allow mountainous communities export energy 4. Generation of expertise to be transferred around and shared Taking into account the objectives 1 and 2 of the strategy proposed by EUROMONTANA, possibilities of exploiting forest biomass and of implementing energy saving measures are examined for the case of Metsovo, a mountainous town in Greece. Problem description Metsovo is a town in Epirus province, Greece, lying at an altitude of 1,100m. The population of the town amounts 3,000 inhabitants. Tourism is the main economic activity. Together with high quality production of cheese and wine make the broader area on of the liveliest in mountainous Greece. The climate in Metsovo area is rather clod, compared with the generally moderate climate of Greece. The mean annual temperature is only 10 o C and this causes 53% greater thermal energy needs than in the nearby city of Ioannina, which lies at an altitude of 480m [2]. Due to the economic crisis, taxes on fuels have increased, causing a significant rise in diesel oil price. Therefore, the Greek households have to confront a significantly increased budget for covering their thermal energy needs. The situation is more intense in mountainous settlements, like Metsovo. 2

3 In 2010 the mean price of heating oil was lower than 0.7 /lit. In 2011 it exceeded 0.8 /lit and in 2012 it is going to rise at the level of 1.2 /lit, due to further tax increases. The inhabitants of Metsovo bearing, additionally, in mind that their usually old, traditional homes have low energy efficiency face the issue of energy poverty, which has serious social consequences. The local society, as well as the local authorities in Metsovo, are concerned about finding ways to reduce the costs required to cover thermal energy needs. Utilization of locally produced biomass (5.000 tn/year firewood production) and energy saving (more than /year are spent for heating purposes) seem to be the main ways of finding an effective solution. Apart from cost reduction, the use of renewables and the application of energy saving measures have also significant environmental benefits and can contribute to the environmental consciousness of the local society. Some of the important facts that have to be encountered in order to ensure an effective improvement of Metsovo energy system are: Which method has to be applied for biomass exploitation? Which is the optimum energy solution, corresponding to environmental, financial, technological and social criteria? Biomass exploitation, energy saving measures or the combination of them fits better to Metsovo needs? This paper tries to find reliable answers to these questions. Methodology adopted The issue of improving a local energy system is eventually an energy planning problem. Before 1970 s, such problems were encountered by optimizing economic or technical performance. The oil crisis in the 1970 s, as well as the increasing social awareness about environmental issues in the 1980 s, made energy planning a more complex procedure [4]. Decision makers need to choose energy projects that respond to several sometimes conflicting criteria. Multicriteria Decision Analysis (MCDA) has been widely used in order to help decision makers take better decisions, in cases where there is more than one conflicting criterion [4]. Therefore, energy planning is a particularly suitable field for applying MCDA. In this paper, the Analytical Hierarchy Process (AHP) method was used to evaluate different alternatives for improving Metsovo energy system. The major characteristic of AHP is the application of pairwise comparisons, which are used both to compare the alternatives with respect to the various criteria and to estimate criteria weights [4]. The results from the comparisons are put into matrices, from which the overall ranking 3

4 criteria of the different solutions can be aggregated. The alternative with the highest overall ranking is preferred to the others. The whole procedure is quite complex and usually special software is used. Four main criteria were used to evaluate improvement options for the energy system of Metsovo, namely Environment, Economy, Technology and Social acceptance. The environmental criterion is divided in two subcriteria, CO 2 emissions and PM emissions. The technological criterion is divided into three subcriteria, utilization of local sources, maturity of technology and energy efficiency. Four options (alternatives) of improving Metsovo energy system were supposed: 1. Use of domestic biomass fired heaters. 2. Creation of a heat and electricity co-generation unit, biomass fired, distributing heat via a district heating system. 3. Application of energy saving measures in the residential sector, including shell insulation, replacement of window frames, installation of solar thermal systems for water heating and installation of automation systems in order to increase the efficiency of central heating systems. 4. Combination of energy saving measures with the use of domestic biomass fired heaters. The criteria weights and therefore the evaluation of the proposed solutions were conducted according to four different scenarios: Environmentally oriented (This scenario emphasizes on environmental performance and secondarily on social acceptance) Economically oriented (Economic efficiency is the key factor in this scenario, followed by technological performance) Focused on local society s priorities (Social acceptance has the greatest influence on this scenario and secondarily economic efficiency, following the general mentality in Metsovo) Focused on local authorities position (Environment is the most significant factor in this scenario, but not as strong as in the first scenario. Economy has also a significant influence) The criteria weights for each scenario are shown in table 1. Table 1: Criteria weights of the several scenarios scenarios Environmental Economic Local Local society s authorities Environment Economy Technology Society

5 Evaluation of Metsovo energy system improvement options Environment Economy Technology Social acceptance CO2 emissions PM emissions Utilization of local sources Maturity of technology Energy efficiency Domestic biomass heaters Biomass cogeneration unit and district heating Energy saving measures in the residential sector Energy saving measures and replacement of oil heaters with biomass ones Figure 1: The hierarchy tree for evaluating improvement options for the energy system of Metsovo The CO 2 emissions reduction percentage and PM emissions reduction (found in table 2) were calculated for each alternative and were used as the basis for the performance of each alternative in criterion 1. Table 2: CO 2 emissions reduction of each alternative Alternatives CO 2 (%) PM emissions (kg/year) Domestic biomass heaters Biomass cogeneration unit & district heating Energy saving measures in the residential sector Energy saving and replacement of oil heaters with biomass ones In order to estimate the scoring against criterion 2 the investment cost of each alternative, as well as its annual economic benefits were calculated. In table 3 the economic benefit to investment cost ratio is shown. Table 3: Annual economic benefit to investment cost ratio Alternatives Annual benefit / Investment cost Domestic biomass heaters Biomass cogeneration unit & district heating Energy saving measures in the residential sector Energy saving and replacement of oil heaters with biomass ones

6 Criteria 3 and 4 cannot be quantified and therefore the use of a measurement scale is the basis for pairwise comparison. The same scale has been used for determining criteria weights for each scenario. Table 4: Measurement scale, commonly used in problems issued with AHP 1 Equally preferred 3 Weak preference 5 Strong preference 7 Very strong preference 9 Extreme importance 2,4,6,8 Intermediate values Alternatives scoring against each criterion The environmental criterion is divided into two subcriteria, whose importance differs between the several scenarios. For example, local society is more concerned about regional pollution matters and therefore in the scenario focused on local society PM emissions are considered more significant than CO 2 emissions. Table 4 contains the alternatives scoring against the environmental criterion for each scenario. Table 5: Alternatives performance regarding the environmental criterion for each scenario Performance Alternatives Environmental Local Local Economic society s authorities Domestic biomass heaters Biomass cogeneration unit & district heating Energy saving measures in the residential sector Energy saving and replacement of oil heaters with biomass ones The alternatives' scoring against the economy criterion are the same among the different scenarios and it is illustrated in table 5. Alternatives Table 6: Alternatives performance related to the economy criterion Performance Domestic biomass heaters Biomass cogeneration unit & district heating Energy saving measures in the residential sector Energy saving and replacement of oil heaters with biomass ones

7 The performance of the several options having to do with the technology criterion is given in table 6. The significance of the subcriteria differs between the four scenarios. In the environmental and local society s scenario utilization of local sources plays the most significant role. Energy efficiency is the most important factor for the economical scenario and maturity of technology has the highest significance for the local authorities scenario. Table 7: Alternatives performance related to technology criterion Performance Alternatives Environmental Local Local Economic society s authorities Domestic biomass heaters Biomass cogeneration unit & district heating Energy saving measures in the residential sector Energy saving and replacement of oil heaters with biomass ones The alternatives scoring against the criterion related to social acceptance, was determined by taking into account the local society s strong interest in energy saving, as well as its skepticism towards unconventional technologies, like biomass fired district heating. Alternatives Table 8: Alternatives performance related to social acceptance criterion Performance Domestic biomass heaters Biomass cogeneration unit & district heating Energy saving measures in the residential sector Energy saving and replacement of oil heaters with biomass ones Results The overall performance of each alternative is extracted by the synthesis of their scoring against each criterion and the criterion s weight. In diagram 1 the overall score of each alternative is presented for the all the scenarios. Energy saving combined with biomass heaters presents the highest performance in two scenarios (environmental and local authorities ). The central biomass co-generation unit takes the first position in the economically oriented scenario, whereas energy saving seems to satisfy the local society s priorities in the best manner. 7

8 The central biomass unit cannot achieve particularly high scores, due to its slightly higher financial performance than the domestic biomass alternative and its very low social acceptance. The economic performance of the energy saving alternative would rise notably, supposing that synthetic window frames could be used instead of wooden ones 1. In such a case the energy saving alternative and the combined energy saving with domestic biomass heaters alternative would get significantly higher overall scores. Alternatives' overall score for each scenario local authorities' scenario local society's scenario economic scenario environmental scenario energy saving + domestic biomass heaters 0,255 0,318 0,288 0,353 energy saving 0,219 0,292 0,286 0,366 central biomass unit 0,183 0,171 0,164 0,277 domestic biomass heaters 0,207 0,175 0,197 0,250 Diagram 1: Overall score of the energy improvement options Concluding remarks The evaluation of the options for improving the current situation regarding thermal energy in the town of Metsovo, using AHP, can help in finding effective solutions, instead of implementing fragmentary policies. The combination of biomass utilization with energy saving measures seems to be the optimum alternative for improving the thermal energy system in a mountainous settlement. Energy poverty is a problem, which can have particularly negative impacts on Europe, in a period of economic decrease [6]. Especially mountainous areas, whose energy requirements are high and their economic activities are restricted, are more vulnerable to energy poverty. Therefore, specialized mountain energy policy is a prerequisite for helping mountain communities overcome a serious part of the difficulties caused by the economic crisis. Integrated energy planning can be helped by multicriteria 1 In the energy saving alternative the new window frames are supposed to be wooden, due to legal restrictions, regarding the protection of vernacular architecture in Metsovo. 8

9 assessment, while maximizing single factors such as energy or financial efficiency leads only to short term reliable solutions. In the town of Metsovo, biomass utilization together with energy saving measures have to be directly applied, in order to lower diesel oil consumption and reduce the budget, required for heating purposes. The multicriteria assessment conducted in this paper is in accordance with a previous study (concerned on economic performance) regarding biomass utilization [7]. Both studies indicate that domestic biomass heaters form a better solution than a central biomass fired unit that feeds a district heating system. It is obvious that not all of the households in Metsovo and other mountainous settlements can afford the cost of energy saving and this can be issued by providing financial subsidy. Energy saving in the residential sector has been promoted by the Greek state by a major program that provided financial contribution to people interested in increasing the energy efficiency of their homes. This program focused on older buildings and the subsidies were given according to each household s income. The problem was that there was no special concern about areas with intense energy needs, such as mountainous ones. The local authorities in Metsovo (and mountainous Greece in general) should try to improve the current status of the energy system. Every possibility of financing energy investments has to be reclaimed. The economic crisis should not form an excuse for inaction. Local communities have to be motivated in the direction of exploiting renewable energy sources in favor of local societies. References 1. M. F. Price (2002). Mountains. Geology, Natural History & Ecosystems. World Life Library. Stillwater, Canada: Voyageur Press. 2. N. Katsoulakos, D. Kaliampakos. Renewable Energy Sources and Mountainous Areas. The Integrated Development of Mountainous Areas, Metsovion Interdisciplinary Research Centre 6 th Interdisciplinary Conference. Metsovo 16-19/9/ Euromontana (2010). Energy in Mountain Areas. Strategy Proposal. Position Paper of Euromontana. 4. E. Loken Use of muticriteria decision analysis methods for energy planning problems. Renewable and Sustainable Energy Reviews. 11 (2007) European Economic and Social Committee (2010). Opinion on Energy Poverty in the context of liberalization and the economic crisis. 7. N. Katsoulakos, D. Kaliampakos. Optimizing biomass utilization in mountainous areas. Global Change and the World s Mountains. International Conference. Perth, Scotland 26-30/9/

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