Long-term thermal power reduction in Okinawa’s island grid: Risk-aware multi-objective optimization of second-life batteries with degradation and circularity assessment

Okinawa, Japan, is an island with a grid heavily dependent on imported liquefied natural gas (LNG), oil, and coal. This exposes it to volatile global fuel prices and a high risk of greenhouse gas emissions. Simultaneously, the rapid adoption of electric vehicles in Japan creates challenges related to the disposal of retired batteries. This study examines the potential of second-life batteries (SLB) to reduce reliance on thermal power and to improve risk-aware planning for the Okinawa grid. A multi-objective optimization framework employing the Non-Dominated Sorting Genetic Algorithm III is applied to minimize total cost intensity (TCOI), operational emissions intensity (OEI), and Conditional Value-at-Risk at the 95% confidence level (CVaR_0.95). Battery degradation and replacement behavior are explicitly modeled, and a post-optimization circularity assessment quantifies material mass flows, recovery potential, and avoided virgin material demand arising from battery second-life and replacement dynamics. Four scenarios are examined, including thermal-dominated systems and hybrid configurations with photovoltaic, wind, and battery storage using either SLBs or new batteries. The optimal SLB-based configuration achieved a TCOI of 184.21 USD/MWh, an OEI of 0.44 tCO2[jls-end-space/]/MWh, and a CVaR_0.95 of 85.29 USD/MWh. The scenario also attained a 7 percentage point higher circularity score relative to the new battery scenario and a 17% thermal reduction relative to the baseline scenario. These findings demonstrate that second-life batteries provide a cost-effective and circular pathway for reducing thermal dependence in island power systems. The proposed framework is transferable in structure, with site-specific inputs requiring local recalibration.