Techno-Economic Feasibility and Optimization of Hybrid Solar-Wind-Biomass Energy Systems in Rural Timor-Leste: A Case Study of Liquiça Municipality

Access to reliable and sustainable electricity remains a critical challenge in Timor-Leste. This island developing nation relies on imported diesel for over 99% of its electricity generation, with the government subsidizing more than 80% of energy costs. This study investigates the techno-economic feasibility of a grid-connected hybrid renewable energy system for rural electrification in Liquiça Municipality. Using HOMER Pro, four configurations were modeled: (i) hybrid system with Combined Heat and Power (CHP) and battery, (ii) hybrid system with CHP only, (iii) hybrid system with battery only, and (iv) hybrid system without CHP and battery. Results indicate that the configuration without CHP and battery yields the lowest Net Present Cost (USD 1.67 million) and Levelized Cost of Energy (USD $0.0669 / \mathrm{kWh}$). However, systems with CHP integration demonstrate superior environmental performance. The hybrid system with CHP and without battery achieved the highest renewable fraction (92.7%), while the configuration with CHP and battery resulted in the most significant reduction in CO<inf xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2</inf> emissions ($701,634 \mathrm{~kg} /$ year). This study highlights the trade-offs between economic cost, sustainability, and grid dependence. Its novelty is comparing CHP and battery integration under Timor-Leste’s unique energy landscape, offering actionable insights for small island developing states transitioning toward cleaner energy systems.