The effects of local interventions on global technological change through spillovers: A modeling framework and application to the road-freight sector.

To address global sustainability challenges, (public) policy interventions are needed to induce or accelerate technological change. While most policy interventions occur on the local level, their innovation effects can spill over to other jurisdictions, potentially having global impact. These spillovers can increase or reduce the incentive for interventions. Lacking to date are computational models that capture these spillover dynamics. Here, we devise a conceptual and methodological approach to quantify ex ante the effects of local demand-side interventions on global competition between incumbent and novel technologies. We introduce two factors that moderate global spillovers-relative size of selection environments and relative innovation potential of competing technologies. Our approach incorporates both factors in a techno-economic discrete choice model that evaluates technology competition over time through endogenized technological learning. We apply this modeling framework to the case of road freight. Different demand-pull interventions and shocks are modeled to assess spillover effects. In the case of road freight, electric vehicles experience growth in most application segments but can still be accelerated substantially through public policy intervention-spillovers occur if strong public interventions are introduced in large regions or in multiple combined regions under club policy interventions. These findings are discussed in the context of club policy interventions and a modeled geopolitical shock in China. A full sensitivity analysis of model input parameters and intervention or shock dynamics reveals high model robustness. Finally, we discuss the implications of the road-freight case study as it might inform the progress of other niche technologies in transitioning sectors.

Additional Emissions and Cost from Storing Electricity in Stationary Battery Systems.

Stationary batteries are an important technological option for renewable energy-based decarbonization of the electricity sector, as they can counterbalance renewable energy sources' intermittency and provide grid-stabilizing services. However, it has been argued that the additional economic cost of batteries, emissions occurring during the manufacturing phase of batteries, and emissions caused by losses during the use phase can reduce batteries' potential in supporting the decarbonization of the electricity sector. Here, we perform a new battery production- and use-phase lifecycle emissions and cost analysis to calculate the additional lifecycle greenhoues gas (GHG) emissions (LCE) and costs (LCC) that arise from storing electricity in six different battery technologies, five applications, and three different geographies. Our results show that the LCE of storing electricity are strongly determined by application and geography, whereas LCC vary with application and technology. Lithium-ion technologies perform best across most applications and geographies on both the LCE and LCC dimensions. Furthermore, we only identify trade-offs between the LCC and the GHG emissions cost when assuming a high social cost of GHG emissions of 180 EUR/tonCO2e. Based on our results, we discuss which dimensions of technological improvement of battery technologies are most desirable from a societal perspective.

The cost of electrifying all households in 40 Sub-Saharan African countries by 2030.

Electrifying sub-Saharan Africa (SSA) requires major investments and policy intervention. Existing analyses focus on the levelized cost of electricity at aggregate levels, leaving the feasibility and affordability of reaching Sustainable Development Goal #7 - access to affordable, reliable, sustainable and modern energy for all - by country unclear. Here, we use the electrification model OnSSET to estimate granular and spatially explicit levelized costs of electricity and costs per person per day (pp/d) for 40 countries in SSA. We find that solar-powered mini-grids and standalone systems drastically lower the cost of electrifying remote and high-cost areas, particularly for lower tiers of electrification. On average, least-cost electrification in SSA at Tier 3 (ca. 365 kWh/household/year), can be provided at 14c USD/kWh or 7c USD pp/d. These results are sensitive to demand assumptions, for example, misguided electrification planning or oversizing due to overestimated demand can lead to substantial cost increases. Our results highlight large variances within countries, which we propose to visualise using electrification cost curves by country. Policymakers should consider such cost curves and use a tailored approach by country and region to reach SDG7 in SSA.

The role of policies in reducing the cost of capital for offshore wind.

Offshore wind will play a critical role in decarbonizing Europe's energy infrastructure. Nevertheless, according to recent financing cost surveys, its investment risk expressed as the cost of capital (CoC) is higher than for onshore wind and solar photovoltaics. This perspective elaborates on the possible reasons behind the offshore wind CoC premium and potential remedies. Our analysis discusses that the massive capital expenditures and construction complexity have concentrated European offshore wind ownership among utilities and oil & gas companies that owing to their legacy investments in fossil fuel infrastructure, have higher return expectations for offshore wind assets. Furthermore, these large-scale investors are bidding zero and negative in highly competitive auctions for offshore wind sites, increasing the project's merchant risks and CoC. We discuss possible policy solutions to alleviate these risks, including revenue stabilization, enabling a more liquid refinancing market, and creating more robust corporate Power Purchase Agreements via government guarantees.

The contribution of corporate initiatives to global renewable electricity deployment.

Climate change is gaining importance on the agenda of senior decision makers in the private sector. Hence, corporate renewable electricity (RE) procurement may become more relevant to the energy transition. RE100 is the largest corporate initiative to foster RE procurement with 315 corporate members as of 2021. Yet, the contribution of such initiatives to the energy transition remains unclear, because public reporting is aggregated on the global level. Here, we develop an approach to map the electricity procured by RE100 companies to jurisdictions worldwide, which allows estimating whether and where RE100 can have a transformative impact. We find that these companies source electricity in 129 jurisdictions, accounting for <1% of total electricity generation (RE and non-RE), thus dampening the hopes about the impact of RE100 on the global energy transition. RE100 companies procure 1.4% of available RE, exceeding 20% in nine jurisdictions. To increase its impact, RE100 should focus on interim targets and expansion. By 2030, stringent and frequent interim targets could lead to a cumulated additional 361 TWh of RE procured by RE100 companies, and a realistic membership expansion could lead to procurement of 7.7% of globally available RE by RE100 companies.

Comparing the levelized cost of electric vehicle charging options in Europe.

With rapidly decreasing purchase prices of electric vehicles, charging costs are becoming ever more important for the diffusion of electric vehicles as required to decarbonize transport. However, the costs of charging electric vehicles in Europe are largely unknown. Here we develop a systematic classification of charging options, gather extensive market data on equipment cost, and employ a levelized cost approach to model charging costs in 30 European countries (European Union 27, Great Britain, Norway, Switzerland) and for 13 different charging options for private passenger transport. The findings demonstrate a large variance of charging costs across countries and charging options, suggesting different policy options to reduce charging costs. A specific analysis on the impacts and relevance of publicly accessible charging station utilization is performed. The results reveal charging costs at these stations to be competitive with fuel costs at typical utilization rates exhibited already today.

Navigating the Clean Energy Transition in the COVID-19 Crisis.

Bjarne Steffen is a senior researcher at ETH Zurich's Energy Politics Group. His research addresses policies related to energy innovation and the role of finance in the energy transition. He previously worked at MIT's Center for Energy and Environmental Policy Research, the World Economic Forum, and a strategy consultancy. Bjarne holds a Master's in economics from the University of Mannheim and a PhD in energy economics from the University of Duisburg-Essen. Florian Egli is a PhD candidate at ETH Zurich's Energy Politics Group. His research focuses on the role of finance in the energy transition and climate finance more generally. He is a World Economic Forum Global Shaper, is associated with the think tank foraus as its former vice president, and held a Mercator Fellowship on International Affairs in 2015 and 2016. Florian holds a Master's in International Economics from the Graduate Institute of International and Development Studies (IHEID) in Geneva. Michael Pahle is head of the working group "Climate and Energy Policy" at the Potsdam-Institute for Climate Impact Research. His research focuses on carbon pricing and power market design. He holds a Master's in Physics from Potsdam University and a PhD in economics from TU Berlin. Tobias S. Schmidt is Assistant Professor and the head of ETH Zurich's Energy Politics Group, an interdisciplinary group analyzing the interaction of energy policy and its underlying politics with technological change in the energy sector. His research covers both developed and developing countries. Tobias holds a Bachelor's and Master's of Science in electrical engineering (energy focus) from the Technical University Munich and a PhD from ETH Zurich in management, technology, and economics.