Model-based step-wise marginal CO2 abatement cost curves to determine least-cost decarbonization pathways for sector-coupled energy systems

Abstract

Energy system modeling is highly relevant to support policymakers in defining strategies to achieve the European Green Deal targets towards carbon neutrality in 2050. Therefore, marginal CO2 abatement cost curves are widely used in climate policy to assess the relationship between total cost changes and CO2 emission reductions. Various methods exist for deriving abatement cost curves, leading to different results and policy implications. Most model-based methods derive smooth curves that can be transformed into step-wise curves through decomposition analysis, lacking system interactions at high temporal, sectoral, and techno-economic resolution. This paper overcomes these limitations by presenting a linear optimization approach with an hourly resolution to derive step-wise marginal CO2 abatement cost curves for the German sector-coupled power system in 2030. Next to methodological insights, results indicate that early adoption of vehicle-to-grid ensures faster photovoltaic rooftop integration by reducing CO2 abatement costs. Further, vehicle-to-grid replaces storage systems and decreases electricity generation costs while having no impact on CO2 abatement costs of ground-mounted photovoltaic and onshore wind. Additionally, results show a high level of techno-economical detail and the least-cost sequential order of an optimal technology portfolio, allowing policymakers to formulate appropriate measures to achieve decarbonization targets.