Energy portfolio optimization under variability for achieving Taiwan 2050 net-zero initiative

The global imperative to limit temperature rise necessitates a substantial transformation in energy systems, primarily through increased adoption of renewable energy sources. However, challenges arise from the intermittency of renewable energy, such as wind and solar photovoltaic, causing generation variability, supply-demand mismatch. Distinct hurdles in energy transition are encountered by regions such as isolated coastal areas and emerging economies, heavily reliant on fossil energy sources. Addressing these complexities necessitates a multifaceted approach, integrating diverse energy sources, carbon capture and storage (CCS), and demand-side management in energy system development. Therefore, this study proposes an integrated energy system optimization model, encompassing energy generation configuration with hourly operational energy management to mitigate energy system variability issues. The model incorporates demand response and carbon pricing policies to minimize costs, reduce emissions, and ensure the energy system's supply reliability. Using Taiwan's 2050 net-zero energy portfolio as optimization cases, results show how, under hourly demand fluctuation and supply intermittency, the projected net-zero energy portfolio requires higher fossil energy than expectation in meeting demand load and is prone to risk of supply shortage. Optimizing energy system design reduces costs by 17.4 % and emissions by 74.4 % compared to the unoptimized 2050 net-zero energy portfolio, while maintaining energy security even with 20 % drop in wind and photovoltaic capacity. Further optimization scenarios demonstrate that pairing energy system optimization with the right demand response and carbon pricing, can reduce emission further to 89.2 % while maintaining cost reduction above 8 %. Development of a feasible near-zero emissions system requires the adjustment and increase in renewable and energy storage penetration, CCS enforcement, along with well-coordinated demand response and carbon pricing implementation to avoid short-sighted cost-cutting measures that compromise sustainability. The proposed model provides valuable insights into effective energy generation configuration and management strategies, contributing significantly to achieving the carbon neutrality goal, for regions outside the developed West, such as the isolated region of Taiwan or developing economies, offering policymakers data-driven strategies for sustainable energy transitions.