This study evaluates the impact of urban planning decisions regarding building stock on energy system design and operation. Three urban planning scenarios are considered for an archetype neighbourhood in Nablus in Palestine. The distinguishing difference is that they have different albedo values for the building stock. A computational platform that combines building simulation, urban climate and energy system optimization (considering Net Present Value (NPV) and Grid Integration Level) is used to assess the scenarios. The study reveals that the annual or peak energy demand is not sufficient to compare two scenarios; it is important to consider energy demand pattern and the renewable energy potential, where an energy system design tool is important. Therefore, it can be concluded that the energy system design tools will play a major role in sustainable urban planning processes.