Energy Transition in Transport Sector from Energy Substitution Perspective

Power and heating generation sector and transport sector contribute a highest GHG emissions and even air pollutions. This paper seeks to investigate life cycle costs and emissions in both the power sector and transport sector, and evaluate the cost-emission efficient (costs for one unit GHG emissions) of the substitution between new energy vehicles and conventional gasoline based vehicles under two electricity mix scenarios. In power sector, wind power and PV power will be cost comparative in 2030 forecasted with learning curve method. With high subsidies, new energy cars could be comparative now, but it still has high costs to lower GHG emissions. When the government subsidy policy is reversible, the emission reduction cost for new energy vehicle consumer will be $ 900/ton. According to the sensitive analysis, the paper suggests that the government implement policies that allocate the cost to the whole life cycle of energy production and consumption related to transport sector energy transition and policies that are in favor of new energy vehicle consumers but not the new energy car producers.