Developing Risk Mitigation Model in Renewable Power Projects: A PLS-SEM Approach

Abstract

High investment, long-term ventures, and involvement of multidisciplinary interactions make renewable power projects unique propositions regarding risks and their management. However, risk issues and mitigation measures concerning the enterprises’ sustainability and the precise analysis of their underlying structure and influences in the context of renewable resources were seldom reported. The present study fills this gap by identifying 34 risk issues and 13 mitigation strategies from enterprises’ annual reports, literature, and expert discussions. A total of 101 responses were collected using a questionnaire survey and analyzed through exploratory factor analysis (EFA). It resulted in 8 risks and 3 mitigation factors. A hypothesized model was developed and tested using partial least square structural equation modeling (PLS-SEM). The analysis revealed the mitigation measures’ positive and strong influence in controlling risk issues. The measures identified are policy framework, proactive planning and process development; digitization, standardization, and creating databases; and improved stakeholder interaction and liaison. This study adds value to the existing body of knowledge by exploring the mitigation measures, their underlying structure, and their precise influence in containing the risk impacts toward renewable energy sectors’ sustainable development through empirical evidence. The risk professionals and enterprises can adopt the results to modify/adopt appropriate approaches to address risk issues and enhance sustainability. The uniqueness of renewable resources and their project development requires a distinct approach to manage their inherent uncertainties. The study explores these unique uncertainties, appropriate mitigation measures, and their underlying structure. The study revealed the critical risks to address and mitigation measures for adoption by sector experts and enterprises to enhance their performance and sustainability. Moreover, the study revealed essential issues that require attention from policymakers and technical institutes to strategize their actions to minimize disputes and to extend their support in ensuring the sectors’ seamless growth, enabling the country to achieve sustainable development.