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Negotiating the selling price of hydropower energy using multi-agent systems in BOT

    Emre Caner Akcay Affiliation
    ; Irem Dikmen Affiliation
    ; M. Talat Birgonul Affiliation
    ; David Arditi Affiliation

Abstract

During the feasibility study of BOT (Build-Operate-Transfer) hydropower investments, the selling price of energy is the most critical parameter that impacts the net present value (NPV) estimated by the investors. Investors usually consider the price of energy guaranteed by the government during their feasibility studies which is the worst case scenario. However, it is apparent that negotiations that take place between investor and broker determine the price of energy which is affected by various sources of uncertainty associated with the energy demand and country conditions. The objective of this study was to make a realistic estimate of the investor’s selling price by modeling the negotiation process between investor and broker using a multi-agent system (MAS). Thus, the factors affecting the negotiation process were identified, a negotiation protocol between the parties was set up, negotiation scenarios were determined, and modelled by using a MAS. The model was tested on a hydropower investment in Turkey and generated more realistic results compared to the current practice. Investors and brokers may benefit from this study because it considers the potential changes in the market as well as the negotiating postures of parties under different scenarios.

Keyword : renewable energy, hydropower investment, multi-agent system, negotiation

How to Cite
Akcay, E. C., Dikmen, I., Birgonul, M. T., & Arditi, D. (2019). Negotiating the selling price of hydropower energy using multi-agent systems in BOT. Journal of Civil Engineering and Management, 25(5), 441-450. https://doi.org/10.3846/jcem.2019.9874
Published in Issue
May 2, 2019
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This work is licensed under a Creative Commons Attribution 4.0 International License.

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