Multi-Criteria Decision-Making for Hybrid Renewable Energy in Small Communities: Key Performance Indicators and Sensitivity Analysis

Abstract

The increasing decentralization of energy systems calls for robust frameworks to evaluate the technical and economic feasibility of hybrid renewable configurations at the community scale. This study presents an integrated methodology that combines Key Performance Indicators (KPIs), sensitivity analysis, and Multi-Criteria Decision-Making to assess hybrid systems in Castanheira de Pera, a small community in central Portugal. Fourteen configurations (C1–C14) integrating hydropower, solar PV, wind, and battery storage were simulated using HOMER Pro 3.16.2, PVsyst 8.0.16, Python 3.14.0, and Excel under both wet and dry hydrological conditions. A gate-controlled hydro-buffering model was applied to optimize short-term storage operation, increasing summer energy generation by 52–88% without additional infrastructure. Among all configurations, C8 achieved the highest Net Present Value (≈EUR 153,700) and a strong Internal Rate of Return (IRR), while maintaining a stable Levelized Cost of Electricity (LCOE) of around 0.042 EUR/kWh. Comparative decision scenarios highlight distinct stakeholder priorities: storage-intensive systems (C14, C11) maximize energy security, whereas medium-scale hybrids (C8, C7) offer superior economic performance. Overall, the results confirm that hybridization significantly improves community energy autonomy and resilience. Future work should extend this framework to include environmental and social indicators, enabling a more comprehensive techno-socio-economic assessment of hybrid renewable systems.