Cost-effective fuel choices in the transportation sector under stringent CO2-emission reduction targets - Global energy systems modelling

Licentiatavhandling, 2006

This thesis analyzes the world’s future energy supply in general, and cost-effective fuel choices in the transportation sector in particular, under stringent CO2 constraints. The analysis is carried out with the help of a global energy systems model (GET), developed and modified specifically for each project. GET is a linear programming model and it has three end-use sectors: electricity, heat and transportation fuel. It is set up to generate the energy supply mix that would meet exogenously given energy demand levels at the lowest global cost. This thesis consists of the following three papers (i) an analysis of why two similar global energy systems models, GET and BEAP, give different results as to whether biofuels will become cost-effective in the transportation sector, (ii) an analysis of cost effective fuel choices in a regionalized version of the GET model and (iii) an analysis of the cost dynamics in the GET model in a further developed version of the model. Conclusions drawn within the scope of this thesis are that biomass is most cost-effectively used for heat production at low CO2 taxes, up to about 75 USD/tC, as shown in both the GET and the BEAP model. The sector in which biomass is most cost-effectively used at higher CO2 taxes depends on assumed possible energy carriers and technologies. If hydrogen and/or electricity derived from carbon free energy sources will not be available in the transportation sector at sufficiently low costs, biofuels become an important option if low or zero carbon emissions are to be achieved. Thus, the long run future for the cost-effective transportation fuel choice is still in the open. Regionalizing the GET 1.0 model will not affect the overall pattern of transportation fuel choices, i.e. that gasoline/diesel remain for some decades in the transportation sector until the carbon constraint becomes increasingly stringent and that solar based hydrogen dominates by the end of this century. In paper III, we find that the required carbon tax level where biofuels become cost-efficient, compared to fossil based fuels, is evasive. The tax level moves upwards with increasing carbon taxes, since this leads to an increasing biomass primary energy price in the model.