Policy-driven City Energy Systems Planning - Spatially Explicit Technology Deployment and Co-Benefits Distribution

Doctoral thesis, 2026

Cities account for more than 75% of the global energy use and 70% of the total emissions, making urban climate action essential for decarbonization efforts and to achieve national climate objectives. Implementing emission reduction measures allows cities to realize a wide range of social, environmental, and economic co-benefits. Policy-driven decarbonization measures and their benefits are not always equitably distributed across urban areas, as socioeconomic and demographic disparities can lead to different levels of technological deployments. Taking into account consumer heterogeneity at high spatial resolution is therefore essential to understand how mitigation measures and their benefits are distributed. This thesis investigates the impacts of city energy plans on future cost-optimal system design, assessing their alignment with national climate objectives, and quantifies the delivery of co-benefits from urban climate action. 

An integrated approach is employed, encompassing inter-connected demand-side and supply-side dynamics. The long-term decarbonization targets and policy measures are incorporated using a cost optimization model. The TIMES model generator is used to develop the TIMES Northern European city model, characterised by high heating and transportation demands and Gothenburg is selected as a suitable case. With the implementation of policy-driven scenarios based on City Energy Plan (CEP), and National Energy and Climate Plan (NECP) and sensitivity analyses, long-term sectoral developments of the buildings and transportation sectors and their impacts on local air pollution, resource efficiency and economic efficiency are evaluated. Cross-sectoral interactions are analyzed through the allocation electrification and bio-based resources, under varying assumptions on future fuel prices. The city is divided into 5 sub-regions to represent consumer heterogeneity based on socioeconomic and demographic characteristics and to quantify the distribution of co-benefits. Co-benefits delivery and distribution are assessed under different assumptions of income-dependent, technology-specific hurdle rates for residential consumers.

The city’s heating system is already largely decarbonized, with only a small share of natural gas-based production remaining. The fossil fuel ban under the city’s energy plan ensures complete phase-out of the remaining fossil-fuel use. The modelling results show that under the NECP scenario, district heating production is reduced by approximately 15% compared to the CEP scenario, as biomass use is constrained by territorial emission reduction targets. Heating supply options for residential buildings  emphasize the declining cost-effectiveness of district heating with time, as the primary heating option for new apartments changes from district heating to heat pumps. Cost-efficient transport sector developments show a rapid deployment of biofuel-driven vehicles, followed by a gradual increase in electrification to meet emissions reduction targets. For passenger cars, the results indicate eventual 100% penetration of electric vehicles, with timelines that vary according to policy interventions and sub-regional factors.

The modelling results on grid infrastructure for electrification of residential heating and passenger vehicles emphasize the need for gradual investments in low-voltage distribution grid. Further, grid capacity investments are expected to reduce, with the deployment of distributed solar photovoltaic systems and battery storages. Bioresources are expected to have a transitory role in the transportation sector decarbonization, supporting the journey towards eventual electrification.  The use of bioresources in the heating sector is expected to evolve to meet district heating demands; however, additional measures would be necessary to continue the use of biomass while complying with the national territorial emission reduction targets.

With a fully electrified passenger car fleet, exhaust emissions from passenger cars would be completely eliminated. However, because approximately 60% of the population belongs to consumer groups facing delayed electrification, the overall air quality benefits are expected to materialize more slowly. On the other hand, particulate-matter emissions from non-exhaust sources (road, brake, tyre) are expected to persist long-term until measures to reduce the use of cars are applied. When assessing the impacts of climate policy on energy affordability, more than 15% of the population is projected to experience elevated energy burdens (more than 3% of income allocation to energy services) under high hurdle rate assumptions, compared to 4% in the base year. In contrast, under low hurdle rate assumptions, the share of the population facing such burdens remains at approximately 4% in 2045. These results highlight the significant long-term operational benefits of decarbonization measures once barriers related to upfront investment costs are reduced.

This study presents the impacts of local energy plans and their alignment with long-term national climate targets. Aligning short-term city plans with long-term national decarbonization targets is crucial to achieving significant and rapid emissions reductions that are sustainable in the long term. Furthermore, quantification of co-benefits in energy systems planning can enable cities to assess the most appropriate actions while accounting for equitable distribution of benefits and burdens. The findings also emphasise the importance of integrated energy systems modelling to capture the interplay between supply-side and demand-side dynamics at the city and sub-regional levels, while accounting for sectoral interactions in their development pathways.