Solving the energy transition riddle: Renewable gas for transport and renewable electricity for heating

Abstract

To achieve the deep decarbonization goals of Paris agreement, European union has set a zero net CO2 emissions target by 2050. This ambitious target can only be achieved by massive reduction of fossil fuels’ share in the primary energy supply side. While the energy mix for different sectors has been studied abundantly in the literature, fewer studies deal with the impact of sector-coupling on achieving the goal of deep decarbonization, with limited representation of emerging low-carbon options and incomplete coverage of the main energy sectors.To this end, we develop a detailed model of energy sector, leaving the vector choice for different sectorial end-use demands endogenous. Applying this model to the French case, we study the synergies of sector-coupling and the impact of the social cost of carbon (SCC) in reaching an optimal carbon-neutral energy mix in 2050.Our results show that (1) a nearly carbon neutral energy sector can be achieved for a SCC value of €200/tCO2, in case of availability of renewable gas. (2) For a SCC value as low as €100/tCO2 renewables become the main source of the primary energy supply and the share of renewable energy can reach up to more than 80% of the primary energy supply. (3) We find that a very big proportion of transport demand is satisfied by gas-powered internal combustion engine vehicles and the share of electric vehicles in the final light transport demand never exceeds 9%. (4) For social cost of carbon values of more than €100/tCO2, the heat sector is fully electrified by individual and central heat pumps. Our sensitivity analysis suggests that (5) a robust SCC of €300/tCO2 would lead to carbon neutrality taking into account cost uncertainties.This study suggests further development of gas charging network (for transport end-use) and heat pumps and investment in renewables to reach climate goals in cost-optimal ways.