CO2 reduction potentials and abatement costs of renewables and flexibility options – A linear optimization approach for the German sector-coupled energy system until 2045

Exploring pathways for transitioning to clean energy to achieve climate change mitigation goals is essential. Addressing the economic impact of decarbonization options requires strategic planning to determine cost-effective CO2 mitigation strategies. The assessment of marginal CO2 abatement cost curves (MACC) is commonly used to link costs and emission reduction of decarbonization measures, with the cumulative CO2 abatement potential and associated costs. This study aims to calculate a step-wise MACC to identify the most cost-effective order of investments in decarbonization measures for the German sector-coupled energy system from 2030 to 2045. It provides in-depth insights into the techno-economic, intertemporal, and intersectoral interactions of decarbonization options by applying a linear optimization model to determine the minimal cost of CO2 abatement. The results show that the optimal strategy for decarbonization includes expanding wind and solar power capacity, and increasing demand-side flexibility, by integrating battery electric vehicles, power-to-heat, and power-to-gas. Results indicate that the interaction between the decarbonization measures is significant and that the integration of surplus electricity through sector-coupling can significantly reduce curtailment. Overall, the presented step-wise MACC approach can support policymakers in determining the most cost-efficient energy strategy by identifying the optimal technology mix to meet specific climate goals.