Energy Policy Scenarios to 2050
Perhaps the most important technological innovations needed between now and 2050 deal with transportation, mainly personal transportation, due to its major contribution to the consumption of oil derivatives. Diesel and hybrid electric vehicles present a cost-effective short-, medium-, and long-term method to increase energy efficiency and reduce total energy consumption. Government incentives to support initial market penetration are appropriate. Fuel cell and battery electric vehicles have high total use potential, but are expected to be less cost-effective than more conventional technologies, even by 2050. Further research toward breakthroughs in technology and cost are necessary for high penetration. Government incentives for consumers, production, and technology research are appropriate, along with continuous assessments of future potential.
Biomass-to-liquid (BTL) and cellulosic ethanol fuels represent significant potential for saving fossil fuel and petroleum. Their long-term cost-effectiveness, therefore market penetration, depends on production costs and the price of oil. Proportional production incentives from governments on these and other alternative fuels, which directly foster lower petroleum or fossil fuel energy consumption, are appropriate to support higher penetration. Government assistance in overcoming initial research and production investment barriers is also appropriate in the short to medium-term. The price of oil is an unknown variable and government policy must be flexible to account for future market developments. CTL (CTL) fuel represents a significant potential for reducing petroleum use and government incentives are appropriate where reduction in petroleum use, rather than fossil fuel consumption, is the priority. Gas-to-liquid (GTL) represents significant potential for supplying liquid fuels with GHG emissions at the same level as diesel fuel.
Investment incentives and research support should be in accord with a full assessment of the potential of each technology in achieving a government's energy objectives. In selecting the method of applying incentives, the level of production or consumer incentive should ideally be technology-neutral and proportional to the performance of the technology or fuel in achieving the relevant energy objective, which is to be established by the government.
Hybrid vehicles can become more competitive and should displace conventional cars in a few decades. Less expensive and better performing electricity storage methods than those presently available with current batteries should make pure electric automobiles, and eventually buses, a competitive solution, thus reducing urban pollution. Even in areas where power generation is mostly thermal, the well-to-wheel efficiency tends to be higher if vehicles are electrically powered.