Economic viability of SNG production from power and CO2

Abstract

Power-to-Gas is a chemical energy storage technology based on converting electrical energy into chemical energy in the form of a certain gas, typically hydrogen or methane. The main advantage of methane, namely synthetic natural gas (SNG), is that in this way the already existing gas infrastructure can be used as transport and storage medium. This article evaluates the economic viability of SNG production from CO2 capture and utilization. As representative examples, California, Ontario, Spain, Sweden, Paraguay, Germany and India electricity markets were considered. At present, the estimated cost of SNG is 70–125 EUR/MWh, from 2 to 7 times higher than fossil natural gas. In a feasible future scenario, the costs can be reduced to 40 EUR/MWh, competing directly with the fossil fuel, especially in countries where it is mainly imported as Germany or Spain. To achieve this goal, further R&D is needed, especially on two key parameters: electrolysis efficiency and methanation capex costs. In any case, the economic viability of SNG is subject to high annual operating hours in order to return the initial investment. Therefore, the SNG process, rather than an intermittent grid storage technology, seems a promising in continuously or seasonal production, having a unique niche market among energy storage technologies.