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Energy conversion and storage: The value of reversible power-to-gas systems

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  • Glenk, Gunther
  • Reichelstein, Stefan

Abstract

In the transition to decarbonized energy systems, Power-to-Gas (PtG) processes have the potential to connect the existing markets for electricity and hydrogen. Specifically, reversible PtG systems can convert electricity to hydrogen at times of ample power supply, yet they can also operate in the reverse direction to deliver electricity during times when power is relatively scarce. Here we develop a model for determining when reversible PtG systems are economically viable. We apply the model to the current market environment in both Germany and Texas and find that the reversibility feature of unitized regenerative fuel cells (solid oxide) makes them already cost-competitive at current hydrogen prices, provided the fluctuations in electricity prices are as pronounced as currently observed in Texas. We further project that, due to their inherent flexibility, reversible PtG systems would remain economically viable at substantially lower hydrogen prices in the future, provided recent technological trends continue over the coming decade.

Suggested Citation

  • Glenk, Gunther & Reichelstein, Stefan, 2021. "Energy conversion and storage: The value of reversible power-to-gas systems," ZEW Discussion Papers 21-053, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:21053
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    References listed on IDEAS

    as
    1. Gunther Glenk & Stefan Reichelstein, 2019. "Publisher Correction: Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(4), pages 347-347, April.
    2. Gunther Glenk & Stefan Reichelstein, 2019. "Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(3), pages 216-222, March.
    3. Buttler, Alexander & Spliethoff, Hartmut, 2018. "Current status of water electrolysis for energy storage, grid balancing and sector coupling via power-to-gas and power-to-liquids: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 2440-2454.
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    More about this item

    Keywords

    Renewable Energy; Power Markets; Hydrogen; Power-to-Gas; Energy Storage;
    All these keywords.

    JEL classification:

    • M2 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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