Social, environmental, and economic consequences of integrating renewable energies in the electricity sector: a review

The global shift from a fossil fuel-based to an electrical-based society is commonly viewed as an ecological improvement. However, the electrical power industry is a major source of carbon dioxide emissions, and incorporating renewable energy can still negatively impact the environment. Despite rising research in renewable energy, the impact of renewable energy consumption on the environment is poorly known. Here, we review the integration of renewable energies into the electricity sector from social, environmental, and economic perspectives. We found that implementing solar photovoltaic, battery storage, wind, hydropower, and bioenergy can provide 504,000 jobs in 2030 and 4.18 million jobs in 2050. For desalinization, photovoltaic/wind/battery storage systems supported by a diesel generator can reduce the cost of water production by 69% and adverse environmental effects by 90%, compared to full fossil fuel systems. The potential of carbon emission reduction increases with the percentage of renewable energy sources utilized. The photovoltaic/wind/hydroelectric system is the most effective in addressing climate change, producing a 2.11–5.46% increase in power generation and a 3.74–71.61% guarantee in share ratios. Compared to single energy systems, hybrid energy systems are more reliable and better equipped to withstand the impacts of climate change on the power supply.

Similar content being viewed by others

The Opportunities and Challenges for 100% Renewable Energy

Chapter © 2022

Energy Conversion from Fossil Fuel to Renewable Energy

Chapter © 2023

Energy Conversion from Fossil Fuel to Renewable Energy

Chapter © 2023

Explore related subjects

Avoid common mistakes on your manuscript.

Introduction

Hydrocarbons, specifically petroleum, coal, and natural gas, have been humanity's primary energy source for the past century. However, the ongoing threat of climate change and its effects on human health and well-being has dramatically increased the need for alternative energy sources. Hydrocarbons still account for over 80% of the world's energy supply. Furthermore, the production and use of fossil fuels are responsible for a significant portion (89%) of global greenhouse gas emissions, including carbon dioxide (Farghali et al. 2022). Additionally, reliance on imported fossil fuels risks energy security (Chen et al. 2022; Garba et al. 2021). To address these concerns, technologies based on renewable energy are crucial for achieving a sustainable energy future. As illustrated in Fig. 1, various forms of renewable energy have the potential to contribute to the global energy mix significantly. In line with this, there is a growing trend toward increasing the utilization of renewable energy sources, with projections suggesting that the share of renewable energy in global energy production will expand from 14 in 2018 to a projected 74% by 2050 (Osman et al. 2022). Globally, the power capacity of hybrid renewable energy increased from 700 to 3100 gigawatts between 2000 and 2021 (Rathod and Subramanian 2022).

figure 1

Recent technological advancements in renewable energy systems have led to a reduction in both economic costs and environmental impacts. However, the intermittent nature of these resources remains a significant challenge in creating a reliable and long-lasting clean energy infrastructure. Integration between various sources is feasible and can increase system efficiency and supply balance, avoid limitations, and decrease carbon emissions. It is essential to evaluate the integration of renewable energy from both sustainability and technical perspectives, energy efficiency, and running costs. In addition, challenges to implementing a hybrid energy system must be addressed. This study explores the potential of combining various renewable energy sources and the associated environmental and social impacts. We examine the utilization of hybrid systems in water desalination and compare these systems' effects concerning their individual sources. Additionally, we consider the potential impact of climate change on the complementary operation of integrated systems and evaluate their flexibility in adapting to such changes. Furthermore, we examine the economic feasibility of renewable energy hybrid systems, including the estimation of costs and the potential for expansion in different countries.

Renewable energies hybridization and global production

Renewable energy systems can be based on a single source or a combination of multiple sources. A single-source system utilizes only one power generation option, such as wind, solar thermal, solar photovoltaic, hydro, biomass, and others, in combination with appropriate energy storage and electrical devices. On the other hand, a hybrid energy system combines energy storage and electrical appliances with two or more power generation options, including both renewable and non-renewable sources, such as diesel generators or small gas turbines (Sinha and Chandel 2014). Different configurations including photovoltaic–wind–diesel hydro–wind–photovoltaic, biomass–wind–photovoltaic, wind–photovoltaic, and photovoltaic–wind–hydrogen/fuel cell systems can be used in a hybrid energy system to generate electricity. Hybrid energy systems offer several advantages over single-source methods, such as increased reliability, decreased need for energy storage, and improved efficiency. However, a hybrid system can be oversized or improperly designed, leading to higher installation costs. Therefore, conducting thorough technical and financial analyses is essential when designing and implementing a hybrid energy system to utilize renewable energy sources effectively. Due to their complexity, hybrid systems require careful evaluation (Sinha and Chandel 2014).

As of the end of 2020, there was a global total of 2799 gigawatts of renewable energy capacity available worldwide. The majority of this capacity, 43%, was from hydropower, with a capacity of 1211 gigawatts. Wind and solar energy comprised equal portions of the remaining capacity, with 733 gigawatts (26%) and 714 gigawatts (26%), respectively. The remaining 5% of energy came from other renewable energy sources, including 500 megawatts of marine energy, 127 gigawatts of bioenergy, and 14 gigawatts of geothermal energy (Al-Shetwi 2022; IRENA 2021). Figure 2 shows the significant increase in the proportion of renewable energy sources used in electricity generation from 2010 to 2020 (Al-Shetwi 2022; IRENA 2021).

figure 2

A hybrid renewable energy system is created to overcome this challenge by combining different energy sources. These hybrid systems have the potential to surpass the capabilities of individual energy-producing technologies in terms of energy efficiency, economics, reliability, and flexibility. Globally, the power capacity of hybrid renewable energy systems increased from 700 to 3100 gigawatts between 2000 and 2021 (Rathod and Subramanian 2022).

Various factors influence renewable energy development, including climate change, global warming, energy security, cost reduction, and emission reduction (Osman et al. 2022). A study by Brodny et al. (2021) evaluated the level of renewable energy development in European Union member states and found that the energy revolution in Europe is progressing rapidly. The study found that between 2008 and 2013, the average gross electricity output from renewable energy sources in the European Union increased from 21.18 to 32.11%, and from 2013 to 2018, it reached 38.16%. This rapid shift toward renewable energy is expected to lead to the sustainable development of the economy and reduced emissions, in line with the European Green Deal concept. To achieve sustainable development, Tabrizian (2019) examined the role of technological innovation and the spread of renewable energy technologies in underdeveloped nations. The study found that renewable energy sources are the best and cleanest substitutes for fossil fuels and have a wide range of beneficial environmental consequences, including a significant decrease in greenhouse gas emissions, which is crucial given concerns about climate change. Green buildings may meet the needs of their residents by using renewable energy sources such as solar, wind, and geothermal energy while reducing their energy consumption and carbon footprint to zero (Chen et al. 2023). However, technology diffusion in this sector is slow, and renewable energy technologies are only gradually gaining traction in underdeveloped nations.

Similarly, Hache (2018) also noted that the spread of renewable energies would complicate global energy geopolitics and issues related to energy security. Therefore, the current increase in renewable energy installations must be considered alongside energy security and technological advancement for a smooth transition to renewable energy. The trend of renewable energy integration is expected to continue growing, with solar and wind power projected to account for 50% of global power generation by 2050 (Gielen et al. 2019).

Jacobson et al. (2017) found that 139 of the world's 195 nations have plans to transition to 80% and 100% renewable energy by 2030 and 2050, respectively. Additionally, many countries plan to use only renewable energy by 2050. A study by Zappa et al. (2019) shows that a 100% renewable energy power system would still require a significant flexible zero-carbon firm capacity to balance variable wind and photovoltaic generation and cover demand when wind and solar supply is low, even when wind and photovoltaic capacity is spatially optimized and electricity can be transmitted across a fully integrated European grid. Hydropower, concentrated solar power, geothermal, biomass, or seasonal storage are all potential sources of this capacity. Still, none of them are currently being used to the extent required to provide a 100% renewable energy system by 2050. The feasibility of a 100% renewable energy system in Europe by 2050 has been examined from various angles by Child et al. (2019) and Hansen et al. (2019). These studies indicate that renewable energy will continue to develop, and future developments in integration are anticipated.

Integrating renewable energy into the electrical power grid offers several benefits for the power and social, economic, and environmental sectors. From an environmental perspective, the electricity sector is currently a significant producer of carbon dioxide emissions (Bella et al. 2014). By 2040, energy-related emissions are predicted to increase by approximately 16% (Elum and Momodu 2017b). Therefore, electrical grids should be a crucial component of any effort to mitigate the worst effects of climate change and global warming. This is why low-carbon electricity generation that heavily relies on renewable energy sources is essential to a sustainable energy future as we progress toward deep decarbonization of the power industry (Bogdanov et al. 2021b). In this context, renewable energy can significantly support energy security and greenhouse gas reduction in the USA (Khoie et al. 2019). The use of fossil fuels and energy imports, the leading causes of carbon dioxide emissions in the USA, can also be reduced.

Additionally, according to Khan (2006), the increase in the integration of renewable energy into the utility grid has resulted in a reduction of approximately 527 million metric tons of carbon dioxide emissions from the electricity industry, as compared to the 46 million metric tons that were eliminated by renewable energy utilization in 2006. The recent renewable energy trend and its production growth will play a crucial role in the sustainable power sector's response to climate change and global warming. By switching to a 100% renewable energy supply, these sectors will reduce their carbon dioxide equivalent emissions by 90% by 2040, bringing them to zero in 2050 (Bogdanov et al. 2021a).

Environmental, social, and techno-economic impacts of hybrid renewable energy systems

Fossil fuel consumption is increasing dramatically due to excessive anthropogenic activities and industrial expansion to meet energy demands. The increase in fossil fuel consumption has risen by 96% since 1965 (Caglar et al. 2022), leading to adverse environmental impacts. Fossil fuels negatively impact air quality, the environment, health, and water resources. The gaseous emissions that can be released into the air due to fossil fuel consumption include greenhouse gases such as carbon oxides (carbon monoxide and carbon dioxide), sulfur oxides (sulfur dioxide and sulfur trioxide), nitrogen oxides (nitrous oxide and nitrogen dioxide), and volatile organic compounds and aerosols such as particulate matter. It was reported that about 72.5% of the global carbon dioxide equivalent emissions could be released from coal consumption (Sayed et al. 2021), causing the global warming phenomenon. The estimated gaseous emissions for various fossil fuels per megawatt-hour (MWh) of power generated are given in Table 1 (Turconi et al. 2013). One of every five deaths worldwide is induced by pollution from fossil fuel consumption (Azarpour et al. 2022). As a result of pollution, 350,000 people passed away in the USA in 2018. The annual cost of the health effects caused by fossil fuel consumption in the USA was reported to be 886.5 billion dollars (Azarpour et al. 2022). To mitigate the adverse impacts associated with fossil fuel consumption and achieve sustainability, the United Nations organization has established 17 goals for sustainable development (SDGs).

figure 3

In comparison with a diesel system, a photovoltaic/wind/diesel/battery/convertor hybrid renewable energy system showed reduced rates of 60.7, 73.7, 62, and 81.5% in terms of the overall cost, renewable percentage, energy cost, and carbon dioxide emissions, respectively (Elmaadawy et al. 2020). A study showed that the photovoltaic/wind/battery storage hybrid renewable energy system supported by a diesel generator system is the most viable system for providing energy to the desalination unit in terms of economic and environmental benefits. It can reduce the cost of water production and adverse environmental effects by 69 and 90%, respectively, compared to other desalination units that rely on fossil fuels (Das et al. 2022b). To minimize the impacts of the water-energy nexus in India's coastal regions, the research examined an efficient desalination unit powered by renewable energy for the coastal villages of Tamil Nadu in India. The best option was a reverse osmosis desalination unit with a photovoltaic/wind/battery/diesel generator hybrid renewable energy system. The techno-economic and environmental analysis results showed that the lowest water cost is $4.57/m 3 , and the carbon dioxide generation is 2887 kg/year (Das et al. 2022b). The effectiveness of renewable options for water desalination, such as solar and wind, was examined. The study revealed that renewable energy sources could produce more energy at a lower cost, reducing the overall water desalination cost (Koroneos et al. 2007). Although using renewable energies in desalination plants is the most efficient approach for reducing carbon emissions, brine waste management must be considered to protect the environment and aquatic habitats.

Climate change and hybrid renewable energy

The majority of methods used to alter the climate of this planet involve entirely burning fossil fuels and cutting down trees. These methods include the human impact on the environment and temperature change. Global warming is mainly caused by climate change (Yoro and Daramola 2020). Burning fossil fuels releases many greenhouse gases into the atmosphere, significantly inducing global warming (Bhattacharjee et al. 2020). Global warming frequently causes natural disasters such as rising sea levels, hurricanes, severe droughts, increased flooding, heavy rainfall, and changes in the monsoon season (Bhattacharjee and Nandi 2020). As a result of changes in climatic parameters, such as river flow based on rainfall and photovoltaic power generation based on solar radiation, hybrid energy systems' resource sequences are also subject to change. Therefore, climate change makes these resources less stable (Milly et al. 2015), a significant obstacle for hybrid energy systems.

Impact of climate change on hybrid energy systems

Climate conditions vary depending on location (Mahesh and Sandhu 2015); hence, climate conditions are essential because the entire electricity generation system relies on them (Freitas et al. 2019). Moreover, energy flux is correlated with climate conditions and renewable energy endowment (Viviescas et al. 2019). For instance, solar energy is affected by daylight hours, unavailability at night, and rainy weather diminishes the intensity of light (Chwieduk 2018). In addition, changes in wind speed directly impact the electricity produced by hydroelectric systems, and seasonal droughts and excessive rainfall can also have an impact (Bhattacharjee and Nandi 2020; Ibrahim et al. 2022; Xiong et al. 2019).

As a result, the development of hybrid energy systems enables it to reduce the adverse effects of climate change on the electricity system while ensuring supply stability, high power quality, and reliability, as well as decreased system efficiency unpredictability. The threat posed by climate change to renewable energy generation is significant, but renewable energy contributes significantly to the electricity grids of many countries (Elum and Momodu 2017a). Extreme climate conditions frequently occur, necessitating more flexible electrical systems to identify and isolate electrical faults and save maintenance costs (Kang et al. 2020). The impact of hybrid energy systems on climate change is demonstrated in Fig. 4 and Table 2.

figure 4

figure 5

Distributed generation systems integration improves the carbon emissions of traditional centralized generation networks; for instance, Liu et al. (2018) simulated a 42% enhanced carbon reduction capacity of off-grid distributed photovoltaic/wind/diesel systems. However, such hybridization increases the average daily energy cost by 10%. Roy et al. (2020) found that innovative distributed hybrid systems applied to biomass/combustion batteries could reduce 1510 tons of carbon dioxide annually. The distributed generation approach markedly saves carbon dioxide emissions and reduces the potential for climate change from the generation system.

In conclusion, the hybrid energy system reduces the possibility of climate change impact and the proportion of greenhouse gases in the output by-product gases due to increasing renewables proportion. Therefore, the hybrid energy system contributes to lowering the carbon emission output of conventional energy sources and, therefore, is more sustainable. In contrast, distributed generation system is a novel power generation type that effectively improves the hybrid energy system's carbon footprint.

Climate change effects on the complementarity of hybrid energy systems

Hybrid energy systems' capacity to generate electricity is severely impacted by the unpredictability of the climate and weather, making hybridization more challenging to offer a secure and consistent power supply (Guezgouz et al. 2022; Lian et al. 2019). Climate variations in runoff rate, solar intensity, and wind speed can lead to uncertainty in complementary operations (Yan et al. 2020; Zhang et al. 2020). Climate-dependent renewables such as wind, solar, and hydropower are mainly subject to uncertain natural conditions, which means there are challenges in providing a reliable and stable electricity supply (Wang et al. 2019a). The energy system's size, sensitivity, and adaptability all impact these uncertainties (Viviescas et al. 2019). Extreme weather events will become more frequent, severe, and prolonged due to climate change, and future climatic scenarios show how this may affect the stability of the world's electrical systems (Panteli and Mancarella 2015; Yang et al. 2022). However, this issue can be partially eased by merging complementary sources into a hybrid system and using the suggested dependable and economic dispatch approach. Hybrid renewable energy systems are more reliable than single energy systems (Abbes et al. 2014; Sawle et al. 2018), which is more advantageous in integrating multiple energy resources (Tezer et al. 2017). Jurasz et al. (2018) studied the complementarity of solar and wind energy, the impact on battery power, the need to reduce the potential for required energy storage, the impact on netload, or the change in complementarity due to climate change. The complementarity of resources can change the storage and system reliability of electricity. Wang et al. (2021) verified that the complementary photovoltaic/wind/hydroelectric energy model could obtain more stable and reliable power output than the single energy model.

Few studies have considered how hybrid energy systems will be impacted by climate change and evaluated how hybrid energy systems might work in tandem to adapt to climate change (Yang et al. 2022). However, this section outlines the parameters that have changed in relation to how the hybrid energy system's complementarity has changed due to climate change. Table 4 and Fig. 6 indicate that the hybrid energy system maintains a higher complementarity under strong climate change, and its complementarity meets the generation load demand.

figure 6

The complementarity of numerous hybrid energy systems listed in Table 4 varies in response to climate change. The higher energy complementarity is observed compared to individual energy systems.

Rapid weather changes will somewhat impact the reliability of the power supply to the distribution network because renewable energy production is closely attached to meteorological conditions (Su et al. 2020). Jiang et al. (2021) measured the robustness of several hybrid photovoltaic/wind/hydroelectric energy types under different climatic conditions (water flow, photovoltaic power, and wind speed). The photovoltaic/wind/hydroelectric system was the most robust energy system to address climate change, resulting in a 4.90% increase in system power generation and a 37% guarantee. Moreover, the authors found that water flow is the largest factor affecting its performance efficiency. The likelihood of successfully satisfying stakeholder criteria through complementary manipulation is significantly higher than in a single operation. The complementary nature of photovoltaic and wind energy can be considered to increase the efficiency of power generation because the complementary manipulation reduces the impact of the penalty function setting in the system power output on the best choice. Yang et al. (2022) simulated and compared the energy complementarity of a photovoltaic/hydroelectric system under 961 different climate conditions data. The hybrid energy scenario adds 410 million kWh of annual electricity generation and a 63.14% guarantee rate, illustrating that hydropower and photovoltaic diminish the sensitivity to climate change impacts under complementary energy operating rules. On the other hand, the single energy system appears vulnerable (guarantee rate: 8.47%).

Hybrid photovoltaic/wind/hydroelectric power systems exhibit higher seasonal complementary energy benefits than separate operations from a single energy source (Tang et al. 2020). In particular, in autumn, the complementarity between energy sources was substantially improved (21.8% increase in the mutual coefficient) and proved that the interconnection of multiple energy sources guarantees year-round electricity and power quality throughout the day. Cheng et al. (2022) also studied complementary energy operations. They used remote sensing to predict energy operations under changing future climate scenarios. They found that complementary processes have higher power generation (5.46% increase) and higher reliability (5.13% increase) than single energy operations. Modern power systems now greatly emphasize the complementing process of hybrid power plants (Ming et al. 2018). In photovoltaic/wind/diesel systems, diesel fuel is only used as a backup energy source when solar and wind energy cannot satisfy load demand (Mandal et al. 2018). Diesel generator sets ensure the system's reliability under extreme climate conditions and enhance the system's economy (Liu et al. 2022). Li et al. (2019) investigated water/photovoltaic complementarity operations. Energy systems operating in a complementary manner can adapt to variable climates when runoff is constrained while being supplemented by generation at the photovoltaic output and increasing the guarantee of meeting urban load requirements by 10.39%. In addition, Puspitarini et al. (2020) found that the increase in flux caused by the accelerated rate of ice melting prompted by rising temperatures was 25% photovoltaic and 75% hydroelectric. Climate change has a significantly less impact on the complementarity of water and solar energy because of the increased sensitivity to changes in temperature and precipitation. Furthermore, elevation, glacier cover, and basin structure have uncertain effects. Higher energy complementarity is well demonstrated compared to individual energy systems.

However, the complementarity results depend on different methods, metrics, spatial and temporal resolutions, and data sample sizes (Canales et al. 2020; Kapica et al. 2021). Thus, complementarity analysis lacks a standard parameter and prevents researchers from comparing findings consistently (Yang et al. 2021). Additionally, there are more complex, multi-objective problems with complementary linked energy economics (Tang et al. 2020). As a result, it will be easier to plan, manage, and evaluate energy systems if diverse unpredictable inputs related to climate change are clearly defined. This will also help to inform sound decisions for planning and operating energy systems in a changing environment (Jiang et al. 2021). To reach the ideal system configuration, climatic modeling projections are used to assess the complementary energy efficiency of the area. Zhang et al. (2019) measured the weather forecast data to derive the optimal solution for the configuration of the photovoltaic/wind/hydrogen energy system, thus improving the system power reliability and selecting the optimal system configuration helps to avoid wasteful capital expenditures.

This section provides an overview of how a hybrid energy system performs in terms of energy efficiency under various climatic situations, which helps to identify the best energy configuration and provides greater climate stability than a single energy system. Hybrid energy systems are more advantageous in mitigating climate change, reducing the system's carbon emissions output. Moreover, complementary regulation between energy sources to adapt to climate change is more flexible and ensures efficient power production between energy sources.

Cost analysis

Economic parameters of the hybrid energy system

Increasing socioeconomic activity due to population growth necessitates a steady energy supply to keep up with demand (Olatomiwa et al. 2015). Satisfying everyday power needs through expensive conventional fuels is a huge challenge for the industry (Boamah 2020). For example, Nigeria's high cost of electricity and lack of reliability has crippled industrialization and national businesses (Adesanya and Pearce 2019; Osakwe 2018). Grid connection technology has made it possible to create electricity from renewable resources, and any surplus energy may be sold to the national grid (Ali et al. 2021a). Hybrid energy systems have the potential to address energy security, energy equity, and environmental sustainability (Pascasio et al. 2021). There is an urgent need for economically viable hybrid energy systems that meet the electrical load requirements of individual households and reduce local reliance on imported fossil fuels (Al-Turjman et al. 2020). Table 5 lists the essential indicators for the economic analysis of the energy system.

figure 7

Unlike individual systems, load demand is a significant factor in developing hybrid renewable energy systems, which offer more dependable electricity for off-grid and stand-alone applications (Al-falahi et al. 2017). The load factor changes with energy demand and fixed costs are inversely correlated with peak load. Rajbongshi et al. (2017) examined the peak fixed load of the photovoltaic/biomass/diesel system. The authors found that the energy cost decreased from $0.145 to $0.119 as the load factor increased from 25 to 40%, so a higher load factor is needed to reduce the cost of electricity generation. Similarly, a solar/diesel/battery hybrid system was implemented in a rural Saharan community where load demand rose from 49.4 kWh/day to 89.4 kWh/day, causing a 33.35% decrease in photovoltaic penetration and a 31.6% reduction in energy cost (Fodhil et al. 2019).

The renewable proportion is the percentage of the system's overall energy production that comes from renewable energy sources and meets the load (Yuan et al. 2022). A high renewable energy percentage indicates a higher fraction of renewable energy in the load. To lessen the effects of environmental issues and to keep costs as low as possible, it is strongly advised to maintain a high share of renewable energy sources (Aziz et al. 2022). Increasing the renewable energy percentage reduces the net present value costs sustained by the system operator (He et al. 2023). However, it is necessary to comply with the government's energy policy by increasing the proportion of renewable energy sources with an appropriate renewable energy ratio and energy costs, reducing fuel and environmental pollution (Tsai et al. 2020). In this context, Pan et al. (2020) used a two-tier model to effectively lower the price of hydrogen supply at the planning stage by modifying the system's share of renewable energy equipment and sourcing power from an up-gradient site. However, large-scale use of renewable energy could threaten the power grid's security (Beyza and Yusta 2021), forcing the traditional distribution grid to move from employing a single power source to various renewable sources. This results in a tidal current reversal on the distribution grid, which changes the grid's power supply mode.

However, voltage distribution brings hidden risks to the distribution grid’s safe operation (Gong et al. 2021; Topić et al. 2015). Even with greater reserve capacity, consuming significant renewable energy is difficult due to transmission congestion and transmission section caps (Tan et al. 2021). As a result, integrating renewable energy into the power system is fraught with volatility and stochasticity, and the share of renewable energy increases stochasticity (Chen et al. 2021). Additionally, the proportion of renewable energy cannot be precisely controlled due to fuel uncertainty. However, by imposing a maximum proportion limit on each technology to keep fuel diversity within reasonable limits and maximum proportion constraint, the proportion of high-cost energy can be controlled to the maximum extent possible (Ioannou et al. 2019).

Costly renewable energy technologies necessitate expenditure (Toopshekan et al. 2020). Depending on the operation mode, adopting hybrid systems can boost overall dependability, lower power costs, or even raise the value of electricity (Esmaeilion 2020; Jurasz et al. 2020). In off-grid mode, capital, operation, maintenance costs, and grid tariff are the inputs for the economic comparison of off-grid systems and grid extensions. In an on-grid way, grid tariff and sell-back rate are the input data (Li et al. 2022). The advantage of being on-grid is that it sells excess clean energy to the grid and supports grid power, while the only source of revenue for being off-grid is salvage (Jahangir et al. 2022). Off-grid systems have higher net present costs and energy costs than grid-connected systems, whereas on-grid systems have fewer components because the primary power consumption is from the grid (Majdi et al. 2021; Nesamalar et al. 2021). On-grid hybrid is beneficial for reducing the cost of energy, but it takes time to set up and can lead to higher installation costs (Chowdhury et al. 2020). Das et al. (2021) conducted an economic feasibility analysis of a hybrid photovoltaic/wind/diesel/battery energy system. They found that the energy cost for an on-grid system (0.072 dollars/kilowatt-hour) was much lower than an off-grid hybrid energy system ($0.28/kWh). Additionally, Ali et al. (2021a) examined the economics of diesel and biogas generators, photovoltaic panels, and wind turbines in off-grid and on-grid scenarios. They found that on-grid systems with lower energy costs (0.072–0.078 dollars/kilowatt-hour) were more suitable for practical applications, with a 44–49% reduction over off-grid systems (0.145–0.167 dollars/kilowatt-hour).

In Guiyang, Li et al. (2021) studied green buildings, grid-connected systems were more cost-effective than off-grid systems for supplying electricity to residential buildings via hybrid intermittent generation systems. In off-grid systems, the battery capacity grows after the peak energy capacity surpasses the maximum electricity demand to prevent overproduction and avoid dumping extra power (Campana et al. 2019). Furthermore, Li et al. (2022) mentioned that increasing the capacity of photovoltaic panels, wind turbines, and converters allows flexibility and cost-effectiveness by shifting from off-grid to on-grid mode.

Most populations cannot afford high energy costs compared to traditional grid purchases. Hybrid energy systems pay much investment upfront due to the high renewable proportion, and the power transmission system still has higher costs. Therefore, it is essential to have a good electricity infrastructure to handle the transmission of these renewables (Das et al. 2020). Facing complex energy installation procedures also requires additional training costs (Ellabban et al. 2014). Photovoltaic prices can change significantly over time, and there is uncertainty in the prices of other energy sources, which good design decisions need to consider. Therefore, various decision variables between energy sources need to be considered in the optimization process to evaluate the optimal size of the hybrid system at the lowest annual cost (Sawle et al. 2018). Energy scheduling is based on previous-day simulations using predicted energy prices, weather data, and load consumption curves. Energy savings by scheduling energy use in houses connected to hybrid energy systems, energy scheduling strategy reduces daily operating costs by 45% (Bouakkaz et al. 2021). The developed procedure considers various constraints, such as the weight penalty cost of carbon emissions, the elemental cost of carbon dioxide, and the annual system component power consumption, to obtain the optimal configuration of the hybrid system (Clarke et al. 2015).

Similarly, inflation or nominal interest rates may vary over time (Das et al. 2022a; Shafiullah et al. 2021). Therefore, some economic policies have been implemented in favor of recommending hybrid energy applications (Xin-gang et al. 2020), for example, incentives in the form of tax exemptions and sales taxes on renewable energy imports of equipment in the UK (Ali et al. 2021b). The renewable energy policy in Bangladesh provides several fiscal incentives, such as a 15% value-added tax exemption on purchasing equipment and raw materials and a 10% increase in the purchase price for the private sector (Mandal et al. 2018). The availability of incentives or support programs through grants or subsidies can further address the high overall energy system costs by reducing investment costs (Odou et al. 2020). The current limitations of determining the economic viability of energy are summarized as shown in Fig. 8.

figure 8

This section summarizes the economic parameters for evaluating hybrid energy systems, assessing net present cost, annualized cost, and cost of energy to provide a comprehensive analysis of the economic viability of hybrid energy systems. In addition, the hybrid energy system represents better economic viability than a single energy system. However, there is also the impact of renewable proportion and off-grid/on-grid operation mode; the system needs to address the challenges of high upfront investment cost, interest rate, and inflation rate resulting in price changes.

Conclusion

Estimating renewable energy hybrid impacts is essential to verify the future expansion of the hybridization concept compared to the individual used source. In addition, the economic estimation potential of such systems in different countries is essential. Here, we discuss the theory of renewable energy combinations, approaches, suggested combinations, models, and economic, environmental, and social impacts. The role of hybrid systems in water desalination was also included. Besides, a comparison between the effect of hybrid energy systems and their respective source was fully discussed to determine the best scenario for climate change mitigation. How the complementary operation of this integrated system could be affected by climate change and its flexibility to climate change was also discussed.

Complementarity between energy sources is improved when adapted to changing climate conditions, maximizing the ability to counteract its effects, and increasing power generation and guarantees. However, a standardized approach for evaluating energy complementarity is lacking, making it necessary to simulate complex climate data with more optimal estimation methods for accuracy.

Reducing the amount of non-renewable energy and increasing the proportion of renewable sources not only reduce net present value costs for system operators but also align with government energy policies and reduces fuel and environmental pollution. Yet, large or poorly designed systems can result in high installation costs, emphasizing the need for thorough technical and financial evaluations before implementing a hybrid energy system. Selecting the most valuable renewable source is vital for decision-makers in ensuring optimal utilization and successful implementation of such complex systems.

References

Acknowledgements

Dr. Ahmed I. Osman and Prof. David W. Rooney wish to acknowledge the support of the Bryden Centre project (project ID VA5048), which was awarded by the European Union’s INTERREG VA Programme, managed by the Special EU Programmes Body (SEUPB), with match funding provided by the Department for the Economy in Northern Ireland and the Department of Business, Enterprise and Innovation in the Republic of Ireland. The views and opinions expressed in this review do not necessarily reflect those of the European Commission or the Special EU Programmes Body (SEUPB).