Opportunities and Challenges of Flexible Electricity-Based Fuel Production for the European Power System

Maximilian Borning, Larissa Doré, Michael Wolff, Julian Walter, Tristan Becker, Grit Walther and Albert Moser
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Maximilian Borning: Institute of High Voltage Equipment and Grids, Digitalization and Energy Economics, RWTH Aachen University, 52056 Aachen, Germany
Larissa Doré: Chair of Operations Management, School of Business and Economics, RWTH Aachen University, 52072 Aachen, Germany
Michael Wolff: Chair of Operations Management, School of Business and Economics, RWTH Aachen University, 52072 Aachen, Germany
Julian Walter: Institute of High Voltage Equipment and Grids, Digitalization and Energy Economics, RWTH Aachen University, 52056 Aachen, Germany
Tristan Becker: Chair of Operations Management, School of Business and Economics, RWTH Aachen University, 52072 Aachen, Germany
Grit Walther: Chair of Operations Management, School of Business and Economics, RWTH Aachen University, 52072 Aachen, Germany
Albert Moser: Institute of High Voltage Equipment and Grids, Digitalization and Energy Economics, RWTH Aachen University, 52056 Aachen, Germany

Sustainability, 2020, vol. 12, issue 23, 1-26

Abstract: To mitigate global warming, the European Union aims at climate neutrality by 2050. In order to reach this, the transportation sector has to contribute especially, which accounts for about a quarter of the European greenhouse gas emissions. Herein, electricity-based fuels are a promising approach for reducing emissions. However, a large-scale deployment of electricity-based fuels has a significant impact on the power system due to high electricity demand and the requirement to use renewable energy sources in order to be sustainable. At the same time, this fuel production could offer additional flexibility for the power system. This article investigates the opportunities and challenges of electricity-based fuels and flexible electricity-based fuel production for the European power system. In a literature analysis, the pivotal role of electricity-based fuels for climate neutrality is confirmed. To analyze the impact of flexible fuel production, European power market simulations for the year 2035 are conducted. Results indicate that flexibilization leads to an increased integration of electricity based on renewable energy sources as well as reductions in both carbon dioxide emissions and total operational costs of the power system. However, very high flexibility levels also benefit high-emission power plants and may even lead to increased emissions.

Keywords: demand-side management; fuels; minimization methods; power system economics; power system simulation; transportation industry (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
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