Competitiveness of Different Operational Concepts for Power-to-Gas in Future Energy Systems

Abstract

In the future energy system flexibility demand will increase due to the growing share of intermittent renewable energy sources (RES). Power-to-Gas (PtG) is one of many flexibility options that can provide flexibility on the demand side by converting electricity into gas during times of high RES supply. This renewable gas is a versatile energy carrier that can be used in the electricity, heating or transport sector as well as for industrial processes. Thus, the use of renewable gas could help to reduce greenhouse gas emissions in these sectors and therewith contribute to fulfil the respective national and EU policy objectives. However, the operation of PtG today is unprofitable because of high specific investment and low efficiency factors of present units. A determining factor for the cost effectiveness is the possible utilisation rate of PtG. Therefore, this paper analyses the potential future deployment hours and their impact on profitability of four different PtG operational concepts. The concepts are distinguished by two criteria. The first distinction is made with regard to the purpose of operation. PtG is assumed either to balance intermittent RES surplus electricity or to use additional RES to produce renewable gas for the heat and transport sector. The second distinction refers to the area of operation, i.e. decentralised or centralised. The respective deployment hours of these four concepts are determined for different future scenarios. The results show that PtG needs high full load hours in order to be competitive. Such numbers can only be achieved in scenarios with extreme high RES penetration. Furthermore, it can be seen that the centralised approach is likely to have lower gas production costs compared to the decentralised one. This is due to the fact that the centralised operation profits from balancing effects of the electricity grid and therefore leads to higher utilisation rates. Nonetheless, the findings also suggest that PtG can only compete with conventional hydrogen production costs or natural gas if electricity for PtG can be obtained at low costs or if the specific investment for electrolysis decreases significantly.