Designing a model for the cost-optimal decommissioning and refurbishment investment decision for gas networks: Application on a real test bed in Austria until 2050

Abstract

The primary goal of this paper is to investigate the most cost-effective decommissioning and refurbishment investment decision for existing gas networks. An optimization model is developed and tested on a real test bed in an Austrian federal state. The analysis is performed from the network operator's perspective and depicts different network decommissioning or refurbishment options under the decision of supplying or not supplying available gas demands. Whether or not there is ensured supply, we find that smaller gas networks (in terms of pipeline capacity and network length) are needed in the future. Analyzed shadow prices indicate that a balance/trade-off between the cost-optimal gas network design with and without ensured supply could lead to a robust and economically competitive future for downsized gas networks. The results demonstrate that it is necessary to socialize network operators’ costs among the remaining consumers connected to the network in the future. This adds a cost component to consumers, which needs to be considered when determining the profitability of sustainable alternatives to natural gas.