Carbon credit-adjusted LCOE of hybrid wind-biomass-battery systems for electrification in small island developing states

Small Island Developing States (SIDS) are heavily dependent on imported fossil fuels and face high energy costs and supply insecurity. This paper presents an integrative approach to assess hybrid wind-biomass energy systems for SIDS by integrating technical, economic, environmental, and fiscal metrics for two Maldivian Islands, N. Manadhoo and N. Magoodhoo. Systems were optimized using HOMER Pro software and validated across five surrogate-assisted metaheuristic algorithms, with a novel Python-based carbon-market valuation framework. Optimized systems achieved renewable penetration of 100% in Magoodhoo and 45.9% in Manadhoo, with Levelized Costs of Electricity (LCOE) of $0.168 to $0.247 per kWh respectively. Annual emissions were reduced by approximately 43.5% in Manadhoo and 99.93% in Magoodhoo relative to diesel baselines. A carbon credit-adjusted LCOE formulation was developed to quantify the effect of avoided emissions under three pricing scenarios. In Magoodhoo, LCOE decreased to $0.165, $0.151, and $0.118 per kWh under conservative, moderate, and ambitious regimes, respectively. In Manadhoo, LCOE decreased to $0.246, $0.241, and $0.230 per kWh across the same regimes. Sensitivity analysis revealed that wind resource variation (4.07 m/s to 6.11 m/s) reduced Net Present Cost (NPC) from $17.1 M to $12.2 M and LCOE from $0.289 to $0.205 per kWh while raising the renewable fraction and lowering emissions, whereas diesel price changes (0.84–1.44 $/L) increased NPC from 9.45 to $16.9 M and LCOE from 0.159 to 0.286 $/kWh. Surrogate-assisted metaheuristic algorithms namely; Genetic Algorithm, Particle Swarm Optimization, Grey Wolf Optimizer, Differential Evolution, and Whale Optimization Algorithm support the robustness of the optimal configurations identified by HOMER within the evaluated feasible design space. This paper introduces an integrated optimisation framework, that illustrates the potential economic implications of sustainable electrification in SIDS under a working carbon credit system.