Techno-economic optimization of a hybrid energy system with limited grid connection in pursuit of net zero carbon emissions for New Zealand

Abstract

As New Zealand moves towards net zero carbon emissions by 2050, multiple factors must be considered including increased electrical load due to electrification, variability of renewable energy generators, required storage capacity, system economics and limitations on grid transmission capacity. Complex and region-specific interactions between the various design choices involved are likely to require an understanding of a range of optimal and near-optimal designs for proposed micro-grid systems as opposed to a single optimal point. This work develops a novel multiscale optimization algorithm for optimization from a univariate capacity optimization approach to a multivariate one. This enhanced algorithm is applied to a grid-connected hybrid energy system consisting of local wind and solar generation, battery storage, and a limited grid connection for industrial and residential loads. This analysis is repeated for current 2023 and forecasted net zero 2050 grid conditions. Development of local generation allows for a 36.8% reduction of levelized cost of electricity in the 2023 case and a 38.6% reduction in the 2050 case. This results in a projected reduction of 19920 tonnes of CO2/yr. The algorithm and methodology developed are broadly applicable to optimization of next-generation energy grids.