An analysis of the framework for Power-to-Gas in Austria

Abstract

Increasing shares of renewables in the future electricity mix will produce more and more intermitted electricity. This inflexible production from i.e. wind and solar PV needs to match flexible demand from customers. Energy storage is the logical step, which needs to be taken in order to use renewables as the main source of energy. Power-to-Gas (PtG) is a promising technology to integrate electricity from renewable energy sources into the current energy system. The production of hydrogen by decomposing water (H2O) with the help of electricity from renewable energy sources gives a storable energy carrier. However, many different factors influence the development of PtG. The research questions address cost-factor, demand for PtG as well as limiting factors. Furthermore, an assessment of framework conditions is conducted and applied to selected countries. Chosen methods contain literature research and valuable input from experts from E.ON and other companies working in this field. Literature research is the key pillar for the technology part. However, reliable information on costs (capital expenditure as well as operational expenditure) is scarce in the literature and mainly based on assumptions. Therefore, input from experts from E.ON is important to get a better understanding of the cost structure of PtG facilities. After showing possible pathways of the produced hydrogen and a section about the regulatory situation, the drivers (share of renewables, policies regarding RES in the respective country, electricity grid infrastructure, etc.) for PtG are identified and assessed. Finally, a tool is set up to use this assessment to compare the readiness for PtG in different countries. The results of this comparison shows that Germany has slightly better framework conditions for PtG compared to Austria and Poland. As of today, PtG facilities are expensive but a significant cost degression is to be expected with economies of scales. Political support is a crucial factor for energy storage technologies and it is important to enable the operation of energy storage facilities by establishing the right regulatory framework.