Supporting Decarbonization Strategies of Local Energy Systems by De-Risking Investments in Renewables: A Case Study on Pantelleria Island

Abstract

Nowadays, energy policymakers are asked to develop strategies to ensure an affordable clean energy supply as well as minimizing investment risks. In addition, the rise of several community engagement schemes and the uptake of user-scale technologies introduce uncertainties that may result in a disruptive factor for energy systems evolution. This paper introduces a novel scenario analysis approach for local energy planning that supports policymakers and investors in prioritizing new renewable power plant investments, addressing the risks deriving from citizens’ choices. Specifically, a combined analysis is performed on the adoption trends of distributed photovoltaic systems and electric vehicles that are expected to heavily influence the evolution of energy systems. For this reason, an energy model is developed for Pantelleria island, and its transition from an oil-based energy supply to a renewable one up to 2050 is investigated. It is demonstrated how optimal-cost renewable-based scenarios can assure a 45% to 52% CO2 emissions reduction and a 6% to 15% overall cost reduction with respect to the diesel-based business-as-usual scenario. The analyzed scenarios disclose the recommended investments in each renewable technology, considering their learning curves and the unpredictability of user-scale technology adoption. Consequently, priorities in the installation of renewable power plants are stressed, starting with the most resilient to future uncertainties, as well as promoting specific incentive measures for citizens’ commitment at a local scale.