Hybrid micro-compressed air energy storage with photovoltaic and diesel generation for off-grid applications: A parametric life cycle and techno-economic study

AbstractReliable and sustainable electricity supply remains a major challenge for remote off-grid communities, which often rely on costly and carbon-intensive diesel generators. Decarbonizing these areas requires the integration of renewable energy technologies with storage solutions to mitigate the variability and intermittency of renewable power production. This study aims to investigate the potential of micro-scale Compressed Air Energy Storage (micro-CAES) to improve the environmental and economic performance of hybrid photovoltaic (PV)–diesel systems under realistic operating conditions. A dynamic, system-level thermodynamic model is coupled with an optimization framework to determine the optimal sizing of photovoltaic and storage components according to alternative objective functions. A key aspect of this work lies in the integration of this optimization with a parametric cradle-to-grave Life Cycle Assessment, enabling the consistent evaluation of environmental impacts as a function of system size. Environmental performance is assessed using Global Warming Potential (GWP), while economic viability is evaluated through the Levelized Cost of Energy (LCOE). Three system configurations, namely diesel-only, PV–diesel, and PV–diesel–CAES, are analyzed for seven representative off-grid locations with differing solar resource availability and diesel price levels. Results show that replacing diesel generation with photovoltaic systems reduces greenhouse gas emissions from 0.996 to approximately 0.598 kgCO2[jls-end-space/]eq/kWh. The integration of micro-CAES enables further reductions, reaching 0.144–0.247 kgCO2[jls-end-space/]eq/kWh depending on site conditions. From an economic perspective, the results indicate that the viability of PV–diesel–CAES systems is primarily driven by system size, diesel fuel price, and site-specific photovoltaic potential. In general, limited round-trip efficiency leads to photovoltaic oversizing and increased capital costs, which tend to outweigh fuel savings. As a result, storage integration becomes advantageous only in scenarios characterized by high diesel prices, where reduced generator operation compensates for the relatively low round-trip efficiency and the capital cost of the storage system. Overall, this work provides a comprehensive techno-economic and environmental assessment of micro-CAES-based hybrid systems for off-grid applications, highlighting their potential for substantial emission reductions while clearly identifying the conditions under which economic competitiveness can be achieved.