The main objective of the activity described in this report – which is also part of Annex 3 Cost-Benefits of the IEA ISGAN initiative – is identifying optimisation approaches that allow to improve the usability by the international research community of the automated Multi Criteria – Cost Benefit Analysis SW ‘smartgrideval’ tool for cloud platforms, developed in the previous phases to evaluate Smart Grid (SG) projects also considering non-monetisable impacts and externalities.

The study of the literature and the application to case studies demonstrated the absence of a generally valid methodology for determining the ‘weighted’ relevance of evaluation criteria for multi-criteria analysis. The use of optimisation approaches applied to the principles of Decision Theory allows modelling real decision-making dynamics; the use of its decision-making rules aims at mathematically defining the satisfaction criterion.

During the previous phases of the activity, based on the practices of the industrial sector, the evaluation approach that combines the use of optimisation techniques with the criterion of ‘minimization of maximum regret’ (Regret Theory) was proposed. In order to prove the effectiveness of this approach, in this study the decision-making rules of the Decision Theory are analysed. Strengths and weaknesses are highlighted in view of selecting the best initiative in the SG field. The applicability of optimisation techniques for each of the analysed rules was also evaluated. The result of the research highlighted the superiority of the decision-making rule established based on the Regret Theory principle.

The proposed approach combines the ‘minimax regret’ rule with the use of an optimisation technique in order to prevent the need to determine specific weighting schemes for the multi-criteria analysis. It is thus possible to cancel the conditioning introduced by the subjectivity of the decision maker and provide the solution with the highest degree of acceptance, considering the entire stakeholder group.

The analysis of the typical dimensions of decision-making problems related to project selection in the SG field highlighted the compatibility of the solution algorithm of the proposed approach with its integration into the SW ‘smartgrideval’ tool, which is planned for the next phase of activity.