Levelized and environmental costs of power-to-gas generation in Germany

Abstract

The transformation to a greener energy system leads to new challenges, as wind and solar power are not always available. A solution for this challenge is the generation of synthetic natural gas (SNG) and hydrogen from (surplus) wind and solar power, so that the green gases can be stored in the natural gas grid long-term and be used for electricity generation when wind and solar power are not accessible. This solution is especially of interest if the storage infrastructure is already in place, as in Germany, since investment costs can be avoided. Because of that, the study investigates the levelized cost of SNG and hydrogen generation in Germany applying the cost estimation method by Rubin et al. For the investigation, different water electrolysis technologies (alkaline electrolysis, polymer exchange membrane, and solid oxide electrolyzer cell with a size of 1 and 100 MW) and energy scenarios (8,000 h grid, 2,000 h grid, wind, and solar) are contemplated. Besides that, the environmental costs of SNG and hydrogen generation in Germany are investigated due to the increasing importance of these costs for society and companies. The author concludes that the levelized costs of SNG and hydrogen are far too high compared to peer studies, as more cost factors have been considered after applying the method by Rubin et al. In terms of the environmental costs, the use of Germany's grid electricity is not recommended for SNG and hydrogen generation since the generation from wind and solar power is more environmentally friendly, whereby wind power is preferable over solar power.