Cited by 120Hybrid Renewable Energy SystemsCatalysts for Methane ReformingIntegrated Energy Systems Optimization

Power-to-Gas as an Emerging profitable business through creating an integrated value chain

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Breyer, Christian, Tsupari, Eemeli, Tikka, Ville, Vainikka, Pasi·2015·Energy Procedia

Abstract

Power-to-gas (PtG) technology has received considerable attention in recent years. However, it has been rather difficult to find profitable business models and niche markets so far. PtG systems can be applied in a broad variety of input and output conditions, mainly determined by prices for electricity, hydrogen, oxygen, heat, natural gas, bio-methane, fossil CO2 emissions, bio-CO2 and grid services, but also full load hours and industrial scaling. Optimized business models are based on an integrated value chain approach for a most beneficial combination of input and output parameters. The financial success is evaluated by a standard annualized profit and loss calculation and a subsequent return on equity consideration. Two cases of PtG integration into an existing pulp mill as well as a nearby bio-diesel plant are taken into account. Commercially available PtG technology is found to be profitable in case of a flexible operation mode offering electricity grid services. Next generation technology, available at the end of the 2010s, in combination with renewables certificates for the transportation sector could generate a return on equity of up to 100% for optimized conditions in an integrated value chain approach. This outstanding high profitability clearly indicates the potential for major PtG markets to be developed rather in the transportation sector and chemical industry than in the electricity sector as seasonal storage option as often proposed.

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Crossref · 10.1016/j.egypro.2015.07.668

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  • The high dynamic flexibility of electrolyzers in conjunction with decreasing capex allows a most valuable demand response leading to very effective energy system integration of variable renewables, reducing curtailment, higher costing storage demand and total system cost.

    “The high dynamic flexibility of electrolyzers [181] in conjunction with decreasing capex [95,126] allows a most valuable demand response leading to a very effective energy system integration of variable renewables, in particular solar PV and wind energy, thus reducing curtailment, higher costing storage demand and total system cost.”

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Authors
Breyer, C., Tsupari, E., Tikka, V., & Vainikka, P.
Affiliations
  • Lappeenranta-Lahti University of Technology (FI)
  • VTT Technical Research Centre of Finland (FI)
Corresponding author
Breyer, Christian
Venue
Energy Procedia
Publisher
Elsevier BV
Published
2015-06
Volume
73
Pages
182-189
ISSN
1876-6102 (ISSN-L)
OpenAlex
W768181411
Cited by
120
References
11
Citations by year
2026: 6 · 2025: 4 · 2024: 10 · 2023: 10 · 2022: 14 · 2021: 12 · 2020: 10 · 2019: 14 · 2018: 14 · 2017: 18 · 2016: 7 · 2015: 1
FWCI
17.38
Type
conference paper
Language
en
Open access
Locations
Energy Procedia (publishedVersion, cc-by-nc-nd)
Topics
  • Physical Sciences › Energy › Energy Engineering and Power Technology › Hybrid Renewable Energy Systems
  • Physical Sciences › Chemical Engineering › Catalysis › Catalysts for Methane Reforming
  • Physical Sciences › Engineering › Electrical and Electronic Engineering › Integrated Energy Systems Optimization
Keywords
power-to-gas, business models, integrated value chains, profitability, return on equity, grid services, renewable energy certificates, transport sector, chemical industry, seasonal energy storage, hydrogen, biomethane, CO2 utilization

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