Power-to-Gas an effective way for Renewable Energy Integration

Posted by MarketsandMarkets on May 20, 2019 1:16:33 PM
MarketsandMarkets

The role of renewable energy is becoming more eminent in the global energy mix. The power generated by renewable energy in 2018 accounts for more than 25% globally with total installed capacity of 2,350 GW. As integration of renewable energy keeps on increasing at an average of at least 8% year on year (International Renewable Energy Agency (IRENA)), there is a lookout for newer ways to conserve and store power generated by the renewables.

Energy storage is done by use of number of technologies such as mechanical storage, thermal storage, electrochemical energy, and other chemical technology. According to the Energy Storage Association (US), electrochemical, mechanical, and thermal storage technologies are the most prominent ones. There is higher focus on energy storage from use of electrochemical technologies such as power-to-gas (Power-to-gas) and rechargeable batteries as well as other chemical technologies as they can integrate in a better manner with renewable electricity, and store energy more effectively, and also produce low or no emissions.

FIGURE 1.  SHARES OF RENEWABLES IN ELECTRICITY, HEAT AND TRANSPORT,2017 VS 2023

SHARES OF RENEWABLES IN ELECTRICITY, HEAT AND TRANSPORT,2017 VS 2023

Source: IEA Renewables forecast 2018 and MarketsandMarkets™ analysis

Current Power-to-gas technologies

Power-to-Gas bridges the power grid and natural gas system to unlock new options for energy conversion and storage. In the current scenario, there are three effective technologies considered for the application in power-to-gas plants. Among the three technologies two are commercially available and one will be commercially available by 2020. Alkaline Electrolysis and Polymer Electrolyte Membrane are two commercially available technologies available at a price of about USD 1,125/kW and USD 2,249/kW respectively, while Solid Oxide Electrolysis is still at the laboratory stage.

Power-to-gas is not yet a business case as many cost reductions and efficiency improvements are still required to enable the deployment of the technology at commercial scale. One commercial development is achieved the technology can be effectively used especially in transportation sector. Thus, all stakeholders need to have close corporation for its commercial development. Stakeholders such as regulators and government must develop a level playing field by acknowledging hydrogen as biofuel, eliminating all end user charges for converted electricity, and comparable stimulation of hydrogen mobility to electromobility. Also, utility industry companies should coordinate their network development plans with each other, and consumers should adapt to new hydrogen and natural gas fuel blends.

FIGURE 2. OVERVIEW OF POWER-TO-GAS PILOT PROJECTS IN EUROPE BY COUNTRIES, 2017

OVERVIEW OF POWER-TO-GAS PILOT PROJECTS IN EUROPE BY COUNTRIES, 2017

Source: European Power-to-Gas and MarketsandMarkets™ analysis

To make the technology readily available the current market barriers have to be overcome effectively. The key initiatives that should be taken in this account are as follows.

  • Polymer Electrolyte Membrane electrolysis should become quickly available on multi MW scale.
  • High capex costs should be subsidized.
  • The price of carbon dioxide emission allowance should be increased.
  • Green Hydrogen certification scheme should be introduced.
  • Power-to-gas must be considered as complementary option for electricity network extension.

There are projects which are being undertaken by end use sectors to effectively bring the technology to end customers and make it commercially available.

  • The automaker company Audis’, e-gas project at Werlte, Germany, is under operation since 2013. The project comprises of three units of 2 MW alkaline electrolyzers equipment each. The project uses surplus electric renewable power to produce hydrogen. Also, located alongside is a biogas plant which produces separate streams of biomethane and CO2. The separated CO2 is further combined with produced hydrogen in methanation process to produce synthetic natural gas. This produced natural gas would acts as a sufficient fuel for 10 vehicles.
  • The BioCat Project in Denmark of Electrochaea, uses biological methanation process. The 1MW electrolyzer yields hydrogen. The primary output of the project produces synthetic natural gas of grid quality to be injected into the Danish distribution grid. It also provides ancillary services to the power grid to help with load balancing. Based on experience from Denmark plant, Electrochaea is aiming to scale up to a larger reactor size of 10MW capacity in Hungary and/or California, US.

In terms of capex costs, pumped hydro (USD 1,900 to USD 3,800/kW, Flywheel (USD 7,800 to USD 9,000/kW) are way higher than advanced batteries (USD 450 to USD 700/kW) and power-to-gas (USD 1,125 to USD 2,249/kW). As advanced batteries and power-to-gas energy storage technologies are in constant research and development processes, their CAPEX costs are expected to come down further in the future. Lower CAPEX costs can be attained from number of parameters such as federal government support, and development of regulations among others. These new technologies of advanced batteries and power-to-gas could enable the storage of vast amounts of electricity anywhere on the grid across the geographies/topographies unlike pumped hydro and thermal which are geography centric. As it is more economical to build their infrastructure near the raw material source of water and fossil fuels.

Power-to-gas is one such concept which entails conversion of surplus renewable electricity into hydrogen gas via electrolysis. This generated hydrogen can be re-electrified at high efficiency by use of combined cycle gas turbines or fuel cells. Power-to-gas is an effective technology for electricity network balancing and energy storage in a timescale of milli seconds and in all the seasons for long durations. Power-to-gas enables optimized renewable electricity storage infrastructure investments necessary to integrate high amount of fluctuating renewable electricity energy.

TABLE 1. ENERGY EFFICIENCY OF DIFFERENT POWER-TO-GAS TECHNOLOGIES

ENERGY EFFICIENCY OF DIFFERENT POWER-TO-GAS TECHNOLOGIESV1.0

MarketsandMarkets™ View Point:

Harihara Balasubramanian - Senior Analyst : Energy and Power, at MarketsandMarkets™, shares his Point of View.

Power-to-gas provides effective functionalities with many commercial and environmental benefits.

  • It reduces need to extend and upgrade electricity network to transport large amount of produced energy from one location to another.
  • Hydrogen produced is carbon free in nature.
  • The energy can be stored for longer periods.
  • The feedstock can be used to support decarbonization of transport sector and energy intensive industries.
  • Power-to-gas reduces carbon intensity of gas sector ensuring its relevance for future energy supply

Conclusion:

Key players of power-to-gas market such as ENGIE Group, MAN Energy Solutions, Hydrogenics, and HZI Group among others are already pioneering opportunities towards from higher use of renewable energy to implement Power-to-gas. Federal governments and regulatory bodies will need to create more effective and sustainable regulations to bring down CAPEX and OPEX cost of the technology aiding the commercialization of Power to Gas technology quickly. With such initiatives the technology can sooner be more adopted in the end user sectors such as power generation, transportation and industry feedstock among others. This will not only ensure smoother compatibility between the renewable energy of Power-to-gas but also avert the effect of carbon emission and create strong outlook for more clean and green sustainable energy supply.

Topics: Energy and Power, battery energy storage systems, renewable energy, power-to-gas

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