Methodological review demonstrates how market dynamics and policy designs alter clean energy investment viability, highlighting the need for scalable optimization models.
As energy systems transition toward low-carbon configurations, strategic energy investments are increasingly important for decarbonization, energy security and system resilience. Evaluating these investments has become complex because their expected outcomes depend on technical performance, anticipated returns, uncertainty, competition, and policy design. This review covers recent advances in literature employing mathematical modelling approaches and optimization frameworks to evaluate and quantify strategic energy investments. In particular, it considers stochastic, robust, bilevel and equilibrium-based approaches used to represent uncertainty, strategic interactions and market responses in investment planning. While previous reviews largely examine investment valuation, system planning, uncertainty and strategic market modeling separately, the present review examines how long-term investment decisions interact with electricity-market operation, strategic competition and sustainability policies. The findings show that these interactions can affect investment profitability and technology choices, while operational flexibility and risk exposure further influence long-term investment value. The review therefore provides a structured synthesis of how technical, market and policy factors are incorporated into optimization models for strategic energy investment decisions. It also identifies limitations in current modeling approaches and highlights the need for more realistic, scalable and policy-relevant models.
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Tzitzili et al. (2026) studied this question.
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