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Decarbonization with Induced Technical Change: Exploring the Niche Potential of Hydrogen in Heavy Transportation

Abstract

Fuel cells and electric batteries are competing technologies for the energy transition in heavy transportation. We explore the conditions for the survival of a unique technology in the long term. Learning by doing suggests focusing on a single technology while differentiation and decreasing return to scale (cost convexity) favor diversification. Exogenous technical change also plays a role. The interaction between these factors is analyzed in a general model. It is proved that in absence of convexity and exogenous technical change, only one technology is used for the whole transition. We then apply this framework to analyze the competition between fuel-cell electric buses (FCEBs) and battery electric buses (BEB) in the European bus sector. There are both learning by doing and exogenous technical change. The model is calibrated and solved. It is shown that the existence of a niche for FCEBs critically depends on the speed at which cost reductions are achieved. The speed depends both on the size of the niche and the rate of learning by doing for FCEBs. Public policies to decentralize the socially optimal trajectory in terms of taxes (carbon) and subsidies (learning by doing) are derived.

Funding source: The authors declare the following financial interests/personal relationships which may be considered as potential competing interests: Albin Kasser reports financial support was provided by Groupe ENGIE. Elodie Le Cadre Loret reports financial support was provided by Groupe ENGIE. Mures Zarea reports financial support was provided by Groupe ENGIE. Albin Kasser reports a relationship with Groupe ENGIE that includes: employment. Elodie Le Cadre Loret reports a relationship with Groupe ENGIE that includes: employment. Mures Zarea reports a relationship with Groupe ENGIE that includes: employment. Albin Kasser, Elodie Le Cadre Loret and Mures Zarea are currently employed by groupe ENGIE. The ENGIE Group is involved in recharging infrastructures for battery-electric and hydrogen fuel cell vehicles.
Related subjects: Applications & Pathways
Countries: France
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/content/journal5435
2024-01-12
2024-06-21
/content/journal5435
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