The purpose of this paper is to demonstrate how small hydropower projects may be evaluated with respect to both economic and environmental objectives. This approach will be applied to the decision making process for a rational selection of design discharge. The economic objective is taken as the net benefits from energy generation while the environmental objective refers to the preservation of the environmental functions in the diverted section.Evaluating environmental consequences is subjected to both randomness and imprecision. To account for the latter characteristic the objective is expressed in a fuzzy way and fuzzy set membership functions are assessed to evaluate changes in water temperature, dissolved oxygen and minimum water depth for that river section. Randomness on the other hand, necessitates encoding of the random characteristics of the hydrological and ecological variables. In either case composite programming, an extension of compromise programming, may be applied to perform a two-level trade-off analysis to assist decision-making. At the first level a compromise is sought within the environmental objective for example between dissolved oxygen and water temperature. At the second level the two objectives are traded-off.
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