No. 31: Cost-Efficient Transition to Clean Energy Transportation Services

Abstract

Comprehensive global decarbonization will require that transportation services cease to rely
on fossil fuels. Here we develop a generic life-cycle cost model to address two closely related
questions central to the emergence of sustainable transportation: (i) the utilization rates
(hours of operation) that rank-order alternative drivetrains in terms of their cost, and (ii)
the cost-efficient share of clean energy drivetrains in a vehicle fleet of competing drivetrains.
Calibrating our model framework in the context of urban transit buses, we examine how the
comparison between diesel and battery-electric buses varies with the specifics of the duty
cycle (route). We find that even for less favorable duty cycles, battery-electric buses will
entail lower life-cycle costs once utilization rates exceed 20% of the annual hours. Yet, the
current economics of that particular application still calls for a one-third share of diesel
drivetrains in a cost-efficient fleet.

Participating Institutions

TRR 266‘s main locations are Paderborn University, HU Berlin, and University of Mannheim. All three locations have been centers for accounting and tax research for many years. They are joined by researchers from LMU Munich, Frankfurt School of Finance and Management, WHU – Otto Beisheim School of Management, European School of Management and Technology in Berlin and Goethe University Frankfurt who share the same research agenda.