Techno-economic assessment of increasing the renewable energy supply in the Canary Islands: The case of Tenerife and Gran Canaria

The Canary Islands power systems face environmental, economic, and social sustainability challenges. They heavily rely on imported fossil fuel for electricity generation; this leads to an increase in the Cost of Electricity (COE) and CO2 emission; a reduction can be made by utilizing more renewable energy sources (RES). This paper presents a comprehensive techno-economic assessment of increasing the RES utilization in Tenerife and Gran Canaria. Results illustrate that the least-cost RES penetration in each island exceeds 60% compared to 18.8% and 15.5% today. This implies a potential 58% reduction in CO2 emission intensity. The additional RES integration decreases the COE by 23.0% and 25.3% in Tenerife and Gran Canaria, respectively. The impact of imposing CO2 emission penalties is explored, results show a slight increase in the optimal RES capacity. Electrical Interconnection between both islands is also investigated, it is found to increase the optimal aggregate RES penetration beyond 70%, reduce COE by 30.3% and lower CO2 emission by 70%, compared to the current situation. Finally, the results obtained can support decision-makers to establish policies to help transform the energy system in islands into a more sustainable and reliable system using RES, energy storage, and energy exchange between islands.