IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v52y2013icp810-818.html
   My bibliography  Save this article

The competitiveness of synthetic natural gas as a propellant in the Swedish fuel market

Author

Listed:
  • Mohseni, Farzad
  • Görling, Martin
  • Alvfors, Per

Abstract

The road transport sector today is almost exclusively dependent on fossil fuels. Consequently, it will need to face a radical change if it aims to switch from a fossil-based system to a renewable-based system. Even though there are many promising technologies under development, they must also be economically viable to be implemented. This paper studies the economic feasibility of synthesizing natural gas through methanation of carbon dioxide and hydrogen from water electrolysis. It is shown that the main influences for profitability are electricity prices, synthetic natural gas (SNG) selling prices and that the by-products from the process are sold. The base scenario generates a 16% annual return on investment assuming that SNG can be sold at the same price as petrol. A general number based on set conditions was that the SNG must be sold at a price about 2.6 times higher per kWh than when bought in form of electricity. The sensitivity analysis indicates that the running costs weigh more heavily than the yearly investment cost and off-peak production can therefore still be economically profitable with only a moderate reduction of electricity price. The calculations and prices are based on Swedish prerequisites but are applicable to other countries and regions.

Suggested Citation

  • Mohseni, Farzad & Görling, Martin & Alvfors, Per, 2013. "The competitiveness of synthetic natural gas as a propellant in the Swedish fuel market," Energy Policy, Elsevier, vol. 52(C), pages 810-818.
    • Handle: RePEc:eee:enepol:v:52:y:2013:i:c:p:810-818
    DOI: 10.1016/j.enpol.2012.10.049
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421512009342
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2012.10.049?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. repec:arz:wpaper:eres2011-88 is not listed on IDEAS
    2. Ma, Hengyun & Oxley, Les, 2011. "Are China's energy markets cointegrated?," China Economic Review, Elsevier, vol. 22(3), pages 398-407, September.
    3. Reidhav, Charlotte & Werner, Sven, 2008. "Profitability of sparse district heating," Applied Energy, Elsevier, vol. 85(9), pages 867-877, September.
    4. A, Savvas & C, Boulton & E, Jepsen, 2011. "Influences on Indigenous Labour Market Outcomes," Staff Working Papers 114, Productivity Commission, Government of Australia.
    5. Mohseni, Farzad & Magnusson, Mimmi & Görling, Martin & Alvfors, Per, 2012. "Biogas from renewable electricity – Increasing a climate neutral fuel supply," Applied Energy, Elsevier, vol. 90(1), pages 11-16.
    6. Saxe, Maria & Alvfors, Per, 2007. "Advantages of integration with industry for electrolytic hydrogen production," Energy, Elsevier, vol. 32(1), pages 42-50.
    7. Lindfeldt, Erik G. & Saxe, Maria & Magnusson, Mimmi & Mohseni, Farzad, 2010. "Strategies for a road transport system based on renewable resources - The case of an import-independent Sweden in 2025," Applied Energy, Elsevier, vol. 87(6), pages 1836-1845, June.
    8. anonymous, 2011. "The future of financial market regulation," Forefront, Federal Reserve Bank of Cleveland, issue Winter, pages 1-2.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Estefania Vega Puga & Gkiokchan Moumin & Nicole Carina Neumann & Martin Roeb & Armin Ardone & Christian Sattler, 2022. "Holistic View on Synthetic Natural Gas Production: A Technical, Economic and Environmental Analysis," Energies, MDPI, vol. 15(5), pages 1-27, February.
    2. Brynolf, Selma & Taljegard, Maria & Grahn, Maria & Hansson, Julia, 2018. "Electrofuels for the transport sector: A review of production costs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 1887-1905.
    3. Mangirdas Morkunas & Gintaras Cernius & Gintare Giriuniene, 2019. "Assessing Business Risks of Natural Gas Trading Companies: Evidence from GET Baltic," Energies, MDPI, vol. 12(14), pages 1-14, July.
    4. Olsson, Linda & Hjalmarsson, Linnea & Wikström, Martina & Larsson, Mårten, 2015. "Bridging the implementation gap: Combining backcasting and policy analysis to study renewable energy in urban road transport," Transport Policy, Elsevier, vol. 37(C), pages 72-82.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Drabik, Dusan & de Gorter, Harry & Timilsina, Govinda R., 2016. "Producing biodiesel from soybeans in Zambia: An economic analysis," Food Policy, Elsevier, vol. 59(C), pages 103-109.
    2. Aneel Karnani & Brent McFerran & Anirban Mukhopadhyay, 2016. "The Obesity Crisis as Market Failure: An Analysis of Systemic Causes and Corrective Mechanisms," Journal of the Association for Consumer Research, University of Chicago Press, vol. 1(3), pages 445-470.
    3. Gonçalves Junior, Oswaldo & Braga Martes, Ana Cristina, 2015. "Democracy, markets and rural development: The case of small goat-milk farmers in the Brazilian northeast," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 16(3), pages 25-33.
    4. Scalice, Régis Kovacs & da Silva, José Oliveira & Ostetto, Jaqueline Nazario & de Paula, Gabriele Aguiar, 2015. "Modular deployment using TRM and function analysis," Technological Forecasting and Social Change, Elsevier, vol. 92(C), pages 1-11.
    5. Beyer, Jürgen & Müller, Robert, 2013. "Market and hierarchy: What the structure of stock exchanges can tell us about the uncertainty in early financial markets," economic sociology. perspectives and conversations, Max Planck Institute for the Study of Societies, vol. 14(3), pages 14-20.
    6. Adriana V. Madzharov & Suresh Ramanathan & Lauren G. Block, 2016. "The Halo Effect of Product Color Lightness on Hedonic Food Consumption," Journal of the Association for Consumer Research, University of Chicago Press, vol. 1(4), pages 579-591.
    7. Vargo, Stephen L. & Koskela-Huotari, Kaisa & Baron, Steve & Edvardsson, Bo & Reynoso, Javier & Colurcio, Maria, 2017. "A systems perspective on markets – Toward a research agenda," Journal of Business Research, Elsevier, vol. 79(C), pages 260-268.
    8. Harkonen, Janne & Haapasalo, Harri & Hanninen, Kai, 2015. "Productisation: A review and research agenda," International Journal of Production Economics, Elsevier, vol. 164(C), pages 65-82.
    9. Liu, Liwei & Ye, Junhong & Zhao, Yufei & Zhao, Erdong, 2015. "The plight of the biomass power generation industry in China – A supply chain risk perspective," Renewable and Sustainable Energy Reviews, Elsevier, vol. 49(C), pages 680-692.
    10. Seckin, Candeniz & Bayulken, Ahmet R., 2013. "Extended Exergy Accounting (EEA) analysis of municipal wastewater treatment – Determination of environmental remediation cost for municipal wastewater," Applied Energy, Elsevier, vol. 110(C), pages 55-64.
    11. Al-Shammari, Eiman Tamah & Keivani, Afram & Shamshirband, Shahaboddin & Mostafaeipour, Ali & Yee, Por Lip & Petković, Dalibor & Ch, Sudheer, 2016. "Prediction of heat load in district heating systems by Support Vector Machine with Firefly searching algorithm," Energy, Elsevier, vol. 95(C), pages 266-273.
    12. Kendel, Adnane & Lazaric, Nathalie & Maréchal, Kevin, 2017. "What do people ‘learn by looking’ at direct feedback on their energy consumption? Results of a field study in Southern France," Energy Policy, Elsevier, vol. 108(C), pages 593-605.
    13. Meesenburg, Wiebke & Ommen, Torben & Thorsen, Jan Eric & Elmegaard, Brian, 2020. "Economic feasibility of ultra-low temperature district heating systems in newly built areas supplied by renewable energy," Energy, Elsevier, vol. 191(C).
    14. George Economides & Apostolis Philippopoulos & Petros Varthalitis, 2016. "Monetary Union, Even Higher Integration, or Back to National Currencies?," CESifo Economic Studies, CESifo Group, vol. 62(2), pages 232-255.
    15. Brand, Christian & Goodman, Anna & Ogilvie, David, 2014. "Evaluating the impacts of new walking and cycling infrastructure on carbon dioxide emissions from motorized travel: A controlled longitudinal study," Applied Energy, Elsevier, vol. 128(C), pages 284-295.
    16. Unternährer, Jérémy & Moret, Stefano & Joost, Stéphane & Maréchal, François, 2017. "Spatial clustering for district heating integration in urban energy systems: Application to geothermal energy," Applied Energy, Elsevier, vol. 190(C), pages 749-763.
    17. Gebremedhin, Alemayehu, 2012. "Introducing District Heating in a Norwegian town – Potential for reduced Local and Global Emissions," Applied Energy, Elsevier, vol. 95(C), pages 300-304.
    18. Brynolf, Selma & Taljegard, Maria & Grahn, Maria & Hansson, Julia, 2018. "Electrofuels for the transport sector: A review of production costs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 81(P2), pages 1887-1905.
    19. Mundaca, Luis & Román, Rocio & Cansino, José M., 2015. "Towards a Green Energy Economy? A macroeconomic-climate evaluation of Sweden’s CO2 emissions," Applied Energy, Elsevier, vol. 148(C), pages 196-209.
    20. Alessandro Guzzini & Marco Pellegrini & Edoardo Pelliconi & Cesare Saccani, 2020. "Low Temperature District Heating: An Expert Opinion Survey," Energies, MDPI, vol. 13(4), pages 1-34, February.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:52:y:2013:i:c:p:810-818. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.