2009 Second International Workshop on Computer Science and Engineering
Risk Assessment of Thermal Power Plant Project Based on Fuzzy Analytic Hierarchy
Process in the Early Operation
Duan Lidong Hiu Dongxiao Lv Haitao Kou Bingen
School of Business and Management,
North China Electric Power University,
Beijing, China
able-18@163.com
Abstract-As the development of technology, the enterprises of
our country have came into the stage of all-round risk
management. But there are still many problems in the initial
stage of risk management about thermal power plant projects.
This paper brings forward the concept of initial risk evaluation
about constructive projects in thermal power plant, puts
forward and builds the evaluation index system for the first
time. Besides we develop traditional Analytic Hierarchy
Process(AHP) using triangular fuzzy numbers according to the
subjective fuzziness of experts' judging, so to solve the weight
of index in each level. Integrated with the idiographic thermal
power units, the risk level of the thermal project is evaluated
according to the membership degree of risk.
Keywords- thermal power plant; initial risk assessment;FuZ7JI
Analytic Hierarchy Process;
I. INTRODUCTION
Thermal power plant project is the basis of people's
livelihood projects and infrastructure project of country's
energy conversion.It is the key link of energy industry chain
and shouldering responsibility to provide adequate, high-
quality power for national economic development and
people's lives. With economic developed, corporations will
face a variety of risks in the market competition.How and
what aspects to assess risks has become a current hot issue.
As infrastructure projects, thermal power plant projects
especially need strengthen the studies of risk assessment to
determine which risk state the plant project is in, and provide
a scientific decision basis for the security operation.
According to division of the period of time, the early time of
the operation of thermal power plant project is the time after
the completion and acceptance of construction project, and
the unit is officially put into operation for one year.
There are not a lot of studies on risk assessment of
construction projects at home and abroad. Currently,
literature [1] studied on tunnel project risk assessment based
on the time and cost modeling.Literature [2] adopted the
Monte Carlo simulation to do the risk assessment on the
progress and cost of projects.In the areas of application, risk
assessment mostly consists of environmental risk assessment
and financing, investment risk assessment, etc. Literature [3]
took port construction for example and discussed the
importance and necessity of the environmental risk
978-0-7695-3881-5/09 $26.00 © 2009 IEEE 473
DOI 10.1109/WCSE.2009.713
10.1109/WCSE.2009.104
assessment in construction project.Focus on the
environmental risk assessment and the steps of a port
construction project.As for risk assessment methods,
literature [6] adopted a multi-level gray evaluation method
for assessment of credit risk. Literature [7] did research on
construction project risk assessment based on multi-attribute
group decision-making methods.Literature [8] builds fuzzy
entropy model on projects risk assessment.But there is rarely
any research about the risk assessment of thermal power
projects at home and abroad.Literature [9] discussed thermal
power project and how to avoid investment risk assessment.
Documentation [10] researched on the risk management for
thermal power projects under the new investment system.In
literature [11] risk management of thermal power project
financing under the new situation were studied. In literature
[12], use the fuzzy extended AHP to evaluate globe supplier.
Currently, there are no scholars do any research on the
operational risks of thermal power construction
projects.Especially, there are not any corresponding study on
the risk of early operations time. In view of the advantages of
AHP method, it is selected as the evaluation method in this
paper. However, traditional AHP do not take sufficient
account of the fuzzy nature about experts' judgments, as well
as the ambiguity of things, so triangular fuzzy numbers is
introduced and adopted to improve the AHP.The fuzzy
analytic hierarchy process (F AHP) is brought fOlWard.
According to the characteristics of thermal power projects,
the risk evaluation index system in the early operation about
thermal power projects is established, and the index weights
is determined using FAHP, and the risk level is defined by
membership degree. With an example of thermal power
projects, early operational risks will be evaluated, and the
risk level of the plant will be assessed in order to provide a
basis for risk management.
II. RISK EVALUATION INDEX SYSTEM OF THERMAL
POWER PLANT
It is the foundation of risk evaluation to build index
system,and the desgin of index system is vital of the validity
and accuracy of evaluation results.The risk assessment of
thermal power plant project in the early operation involves
many aspects,beacause risk evaluation index system is the
integration of comprehensive evaluation and risk
management.It is necessary to consider the comprehensive Project risk Xu
evaluation methods and characteristics of risk management
Construction Risk of cost control X 12
to identify the hidden risks.Therefore,the process of the
period risk Equipment procurement risk X 13
establishment of index system is the combiantion of risk
identification and indicator screening.Considering the Risk of construction safety X l4
various factors,We eastablish the indicator system in Table I. Risk of purchase price X 21

III. MENDED Fuzzy ANALYTIC HIERARCHY PROCESS Policy risk Risk of scheduling methods X 22
Power market risk X 23
A. Judgment scale matrix table based on triangular fuzzy
Risk of fuel management X 31
number
Maintenance arrangement risk
Tradtion Analytic Hierarchy Process generally builds the Risk of X 32
judgment matrix of various structure factors with scaling n operating Security operational risk X 33
from I to 9.1t neglects the ambiguity of subjective judgments d process
Load forecasting risk X 34
and object.But triangular fuzzy number(TFN) can reflect the e
ambiguity of judgment.So replace the tradtional judgment x Human resources risk X 3S
scaling with triangular fuzzy number. S Debt risk X 41

B. The evaluation process Y Financial Risk Investment risk X 42

1) Establish hierarchy model .Decompose the problem Risk of capital recovery X 43

into different elements, according to the interaction and e S02 emission risk X 51
subordinate relationship of various factors.A hierarchical m
Environmental NOx emission risk X S2
structure model is established.
risks
2) Establish fuzzy judgment matrix. Set indicator in the Sewage emission risk X S3
index system as: x = (X 1 ,X2 ,···,xn ) .Compare x j with Risk of solid waste handling X S4
Competitive risks X 61
other indicators xj (i, j = 1,2,···, n) about relative
Risks for Continued risk of internal factors
importance. Gain n kinds of triangular fuzzy number,shown sustainable X 62
as: development
Continuing risk of external factors
M ~"M :" ... ,M;, X 63

Which M~, ( j = 1,2, ... , n) stands for trangular fuzzy

TABLE II. JUDGMENT MATRIX SCALING TABLE BASED ON
TRANGULARFUZZY~ER

number. Reciprocal of
3) Calculate the fuzzy comprehensive importance of Semantic value TFN
TFN
various factors. For the matrix of 2 to 2 factors, calculate
equal (1,1,1) (1,1,1)
fuzzy comprehensive importance of i object with Equation
(1) may equal (1/2,1,3/2) (2/3,1,2)
appreciably
(1,3/2,2) (1/2,2/3,1)
important
important (3/2,2,5/2) (2/5,1/2,2/3)

thereinto: very important (2,5/2,3) (1/3,2/5,1/2)

~ML ~[~aj,~bj'~CjJ (2) 4) Calculate the probable comparison value of fuzzy

number from formula (4)

j = 1,2, ... ,m
V(M 2 '2 MJ = hgt(M 1 nM2 ) =

1 1 1 (4)
n 'n 'n
(3)

a -c
;=1 ;=1 ;=1 1 2 others
i = 1,2, .. .,n (b -cJ-(b -aJ
2 l

5) Set least comparison number as final number,its

TABLE I. SYSTEM INDEX OF RISK ASSESSMENT IN THE EARLY defination is shown as follows:
OPERATION

474
 state of thermal power plant projection,to gian the risk
V(M'2~,M2'·· .,Mk ) =minV(M'2A1;)
condition of projection.According to evaluation conclusion,
i=~2, .. .,k provide a basis for risk management of thermal power
6) Suppose plants.The application of fuzzy analytic hierarchy process is
to solve the index weight. Legacy of the risk to the
d'(A i ) = min V(Si '2 S k ) construction period as an example
(k = 1,2, ... ,n;k"* i) Solve various inditors weight with FAHP,based on
so wieght vector can be shown as: previously established thermal power plant project risk
evaluation index system in the early operation.Take the
W' = (d'(AJ,d'(A 2), ...d'(AJY construction period risk as examples,and set the third
Then standardize them to gain the standard vector: XII' X 12 , X 13 , X I4
class integrated values are
W = (d(AJ,d(A 2), ... d(AJY Sp S 2,S3,S4
According to former process, calculate the weighted
vector of various assessment indicator by the relation among Solve them by formula(l),and the process is as follows:
indexes. SI =(4.5,6,7.5) Q9 (1/23.50,1/18.57,1/13.70)=(0.19,0.32,0.55)
IV. THE MEMBERSHIP DEGREE OF RISK S2 =(4.5,5.67,7) Q9 (1/23.50,1/18.57,1/13.70)=(0.19,0.31,0.
51)
A. Eatablish fuzzy set
Suppose element set for the evaluated indicator: S3 =(2.74,3.5,4.67) Q9 (1/23.50,1/18.57,1/13.70)=(0.15,0.24
U = {U I ,U 2 ;",U n } ,0.45)
i-I 2 ···n ,n is the number of evaluted
Thereinto, - " S4 =(3.17,4.17,4.57) Q9 (1/23.50,1/18.57,1/13.70)=(0.05,0.1
indicator in the first rank; 3,0.21).
Ui = {Uil , U i2 , ••• U iq } , j = 1,2, ... q S I' S 2' S 3' S 4 by formula(2)
Compare
q is the number of indicator in the second rank. Set V(SI '2S2)=1 ; V(SI '2SJ=l ; V(SI '2S4 )=1
comment set
v = {~,v~, ... ,Vm} V(S2 '2 SI) = (0.19-0.51)/[(0.31-0.51)-(0.32-0.51)-(0.32-

Vk'IS assessment result, k=12··· m . the 0.19)]=0.95;V(S2 '2 SJ = 1 , V(S2 '2 S4) = 1
w hih
C "',m IS
number comment grade. V(S3 '2 SJ = 0.76 V(S3 '2 SJ = 0.80
B. Evaluate the single factor to gain judgment matrix V(S3 '2 S4) = 1 , V(S4 '2 SJ = 0.07
Calculate membership degree of various factor to each
' a fu zzy mappmg' . f'U~Vfrom U to V to
V(S4 '2 S2) = 0.08; V(S4 '2 SJ = 0.33
rankG
. am
According to equation 6,we can gain
. R1
. dge matnx
so 1ve JU d'(SJ = minV(SI '2 S2,S3,S4) = 1
'ill 'il2 'ilm d'(S2) = 0.95; d'(SJ = 0.76; d'(S4) = 0.07
'i21 'in 'i2m d'(S)
1\ = ('ilk)q*m = (6)
By ,gain the weighted vector
W' = (1,0.95,0.76,0.07Y
'iql 'i q2 'iqm Then standardizate it to gain weight matrix:
(i = 1" 2 ... , n) WeI = (0.36,0.34,0.27,0·03Y
Which 'ilk is the membership degree of indicator u ij to Take it as before,gian the second class index weight:
comment rank. We = (0.12,0.20,0.22,0.12,0.20,0.15Y
V. SAMPLES Get the third class index weighted as follows:
Select a 2 x600MW thermal power plant construction We2 = (0.67,0.02,0.31Y
project as sample.Two projects are completed in January and
March,2008 and transfer after the completion of 168 hours at We3 = (0.52,0.01,0.35,0.05,0.11Y
fuliload trial operation. So far,thermal power projection is in
operation for one year.It is necessary to evaluate the risk We4 = (0.31,0.12,0.57Y

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 Wc5 = (0.34,0. 17,0.24,0.2SY 0.14 0.23 0.26 0.23 0.13
Wc6 = (0.33,0.37,0.30Y 0.10 0.10 0.33 0.36 0.10
According to the level of relations between the indicators, 0.11 0.24 0.24 0.36 0.10
determine the final weight of each indicator. Based on the c* =
characteristics of thermal power plants, risk assessment will 0.39 0.24 0.13 0.11 0.06
be defined as five levels, namely the "very low, low, medium,
high, very high". Select industry experts and provide related 0.21 0.28 0.34 0.11 0.06
operation data of power plant projection.Collect the opinion 0.20 0.34 0.31 0.08 0.07
of every expert through letters on the risk indicators of the
status ofjudges. At last,gain the risk membership vector of thermal power
plant.
TABLE III. RISK INDEX OF MEMBERSHIP DEGREE e = (0.18,0.23,0.28,0.23,0.09)
Risk grade and membership degree Finally,based on the principle of greatest membership
Index very very
degree of risk,the project locates in the medium risk rank.
low medium high
low hi h
VI. CONCLUSION
Xu 0.2 0.3 0.2 0.2 0.1
X12 0.1 0.2 0.3 0.2 0.2 In this paper, the concept of risk assessment of thermal
power plant project in the early operation period is proposed
X13 0.1 0.2 0.3 0.3 0.1
for the first time.In accordance with the characteristics of
Xl4 0.2 0.1 0.3 0.3 0.1 thermal power plant project, the early operation risk
X21 0.1 0.1 0.3 0.4 0.1 evaluation index system is established.The index system is
X22 0.2 0.3 0.3 0.1 0.1 relatively comprehensive and has strong interoperability.
AHP based on triangular fuzzy number is adopted to
X23 0.1 0.1 0.4 0.3 0.1
determine the weights of indexes. The ambiguity of
X31 0.05 0.05 0.2 0.6 0.1 subjective judgments is fully accounted of, so that the index
X32 0.1 0.8 0.1 0.05 0.05 weight becomes more reasonable. The mode of risk
X33 0.1 0.4 0.3 0.1 0.1 membership is applied to define the risk level of each index,
X34 0.2 0.3 0.3 0.1 0.1
and comprehensive evaluation methods are adopted to gain
the project risk rating.
X 3S 0.3 0.4 0.1 0.1 0.1
Based on the principle of largest membership degree, the
X41 0.3 0.4 0.15 0.1 0.05 level of policy risk and operational risk is the
X42 0.1 0.3 0.2 0.2 0.1 highest.Managers of power plant should strengthen the
X43 0.5 0.15 0.1 0.1 0.05
prevention of policy risk and make preventive measures.
According to operational aspects of the project, fuel
X51 0.2 0.4 0.3 0.05 0.05
management should be focused on.
X S2 0.1 0.1 0.5 0.2 0.1
X S3 0.1 0.2 0.5 0.15 0.05
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