Unveiling the cost competitiveness of sector coupling technologies - Policy impacts on levelised costs of heat pumps and battery electric vehicles in Germany

Jan Frederick George*, Anne Held, Jenny Winkler, Wolfgang Eichhammer, Mario Ragwitz

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

Heat pumps and battery electric vehicles play a crucial role in achieving a climate-neutral economy and integrating the Energy Efficiency First Principle into the building and transport sectors, rendering the overall energy system more efficient. To achieve cost competitiveness of these new technologies compared to conventional ones, investments, operating costs and conversion efficiencies are important. We conducted micro-simulations of the development of levelised cost of heat and transport for these sector coupling technologies to assess the direct cost impact of these parameters. With a broad and in-depth analysis of economies of scale, we determine future bandwidths of investment development. Based on this data, we compared implications of two policy scenarios of taxes and levies on final energy prices using a German case study. The first scenario considers recently adjusted taxes and levies: the national emissions trading system in 2021 and the abolishment of the electricity levy to finance renewable energy support in 2022. A counterfactual scenario includes previous framework conditions. Our results show that rising carbon and lower electricity prices already economically favour heat pumps from 2020 onwards. In contrast, taxes and levies do not decisively impact the cost competitiveness of battery electric vehicles, but expected reductions in manufacturing cost do.

Original languageEnglish
Article number100149
Pages (from-to)1-15
Number of pages15
JournalSmart Energy
Volume15
DOIs
Publication statusPublished - Aug 2024

Bibliographical note

Publisher Copyright:
© 2024 The Authors

Funding

The authors are grateful to the anonymous reviewers for their valuable comments. Furthermore, they thank Barbara Koch, Chair of Remote Sensing and Landscape Information Systems at the University of Freiburg, for her advice and support. In addition, we would like to thank Philip Bolland, Catharina Lutz and Paula van Laak for their support in data procurement. Funding from the Kopernikus-Project Ariadne (FKZ 03SFK5D0) by the German Federal Ministry of Education and Research and the DiMA-Grids Project (03EI6038A) by the German Federal Ministry for Economic Affairs and Climate Action is gratefully acknowledged. Responsibility for the article's content lies with the authors alone. The authors are grateful to the anonymous reviewers for their valuable comments. Furthermore, they thank Barbara Koch, Chair of Remote Sensing and Landscape Information Systems at the University of Freiburg, for her advice and support. In addition, we would like to thank Philip Bolland, Catharina Lutz and Paula van Laak for their support in data procurement. Funding from the Kopernikus-Projekt Ariadne (FKZ 03SFK5D0) by the German Federal Ministry of Education and Research is gratefully acknowledged. Responsibility for the article\u2019s content lies with the authors alone.

FundersFunder number
Kopernikus-Project Ariadne
German Federal Ministry for Economic Affairs and Climate Action
Kopernikus-Projekt AriadneFKZ 03SFK5D0
Bundesministerium für Bildung und Forschung03EI6038A
Bundesministerium für Bildung und Forschung

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