Degradation of power generation capacity in island systems: a causal decomposition framework and application to the Canary Islands

Abstract

Island power systems often show a large gap between nominal installed capacity and the energy that can be effectively delivered due to cumulative technical and operational constraints. This paper proposes a causal decomposition framework that estimates effective capacity through six multiplicative penalty factors: grid constraints, fuel-related efficiency penalties, climate effects on renewables, equipment obsolescence, suboptimal operational management, and stability/inertia requirements. The framework is applied to the Canary Islands using 2023 official statistics. Results show that the 2023 production (9,222.5 GWh) corresponds to 79.46% of the theoretical maximum potential, implying an overall loss of 20.54%. The dominant contributors are grid constraints and equipment obsolescence, while fuel, climate, operational management, and stability requirements add non-negligible losses. The framework is transferable and can be replicated in other island systems and microgrids using publicly available operational data, enabling consistent benchmarking and prioritization of capacity-recovery measures.