Positive influence of CO2 pricing

H2 production costs as a function of production quantity and investment total.
H2 production costs as a function of production quantity and investment total.

Synthetic gases will play an important role in the full supply of renewable energies for Germany’s energy requirements. The meta-analysis of [1] shows that, according to several studies, an electrolysis capacity of more than 100 GW is required in the future energy system in Germany. If such an electrolysis capacity is to be installed in the course of the next few decades, it will be necessary to ramp up the market in good time so that market-driven, reliable and inexpensive plants can be made available.

For this development, first scaling effects must be realized from a certain point in time. To this end, it is necessary to enable economically viable operation during the market run-up. This article will show the influence of CO2 pricing on the economic efficiency of power-to-gas (PtG) plants.

First, the H2 production costs are analysed as a function of the investment sum and the production quantity, whereby different variants of electricity procurement are considered. Subsequently, the influence of pricing CO2 emissions is discussed.

The electricity procurement costs are minimised on the basis of a mathematical optimisation model, taking into account hydrogen sales, so that hydrogen production takes place predominantly in times with favourable electricity prices or at favourable control power prices [2].

Scaling effects reduce costs

If the production quantity of a good increases, the manufacturing costs are reduced in accordance with the price experience curve. This effect has already been quantified in other technology areas. For example, the prices for PV plants were reduced by around 24 percent with a doubling of the installed capacity [3]. For wind turbines, an experience curve of 7 percent for offshore wind energy and 10 percent for onshore wind energy is cited [4].

Use to estimate future investment amounts for PtG plants [5] a factor of 13 percent for the reduction of the investment sum with a doubling of the installed capacity, a value that is estimated to be plausible for plants in chemical process engineering [5]. Based on this learning rate, the authors indicate a possible reduction of the investment amount for PtG plants to 500 €/kW with an installed capacity of more than 10 GW. The investment amount of 300 €/kW is valid after [6] as a possible cost reduction target. In order to achieve these cost targets, the authors state that larger production volumes, an improved supply industry and further technological improvements, such as in the field of membranes and catalysts, are necessary.

read more in H2-international October 2019

Martin Kopp
Prof. Birgit Scheppat
both RheinMain University ofApplied Sciences, Wiesbaden

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