Green Innovation in Energy Storage for Isolated Microgrids: A Monte Carlo Approach

Jake Elliot (), Les Bowtell () and Jason Brown
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Jake Elliot: School of Engineering, University of Southern Queensland, Toowoomba, QLD 4350, Australia
Les Bowtell: School of Engineering, University of Southern Queensland, Toowoomba, QLD 4350, Australia
Jason Brown: School of Electrical Engineering and Robotics, Queensland University of Technology, Brisbane, QLD 4000, Australia

Energies, 2025, vol. 18, issue 17, 1-21

Abstract: Thursday Island, a remote administrative hub in Australia’s Torres Strait, exemplifies the socio-technical challenges of transitioning to sustainable energy amid diesel dependence and the intermittency of renewables. As Australia pursues Net Zero by 2050, innovative storage solutions are pivotal for enabling green innovation in isolated microgrids. This study evaluates Vanadium Redox Flow Batteries (VRFBs) and Lithium-Ion batteries as key enabling technologies, using a stochastic Monte Carlo simulation to assess their economic viability through Levelized Cost of Storage (LCOS), incorporating uncertainties in capital costs, operations, and performance over 20 years. Employing a stochastic Monte Carlo simulation with 10,000 iterations, this study provides a probabilistic assessment of LCOS, incorporating uncertainties in key parameters such as CAPEX, OPEX, efficiency, and discount rates, offering a novel, data-driven framework for evaluating storage viability in remote microgrids. Results indicate VRFBs’ superiority with a mean LCOS of 168.30 AUD/MWh versus 173.50 AUD/MWh for Lithium-Ion, driven by scalability, durability, and safety—attributes that address socio-economic barriers like high operational costs and environmental risks in tropical, off-grid settings. By framing VRFBs as an innovative green solution, this analysis highlights opportunities for new business models in remote energy sectors, such as reduced fossil fuel reliance (3.6 million litres diesel annually) and enhanced community resilience against energy poverty. It also underscores challenges, including capital uncertainties and policy needs for innovation uptake. This empirical case study contributes to the sustainable energy transition discourse, offering insights for policymakers on overcoming resistance to decarbonization in geographically constrained contexts, aligning with green innovation goals for systemic sustainability.

Keywords: green innovation; isolated microgrids; sustainable energy transition; energy storage; levelized cost of storage; Monte Carlo simulation; socio-technical challenges; remote decarbonization (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2025
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