Power-to-gas in electricity markets dominated by renewables
Charlotte van Leeuwen and
Applied Energy, 2018, vol. 232, issue C, 258-272
This paper analyses the feasibility of power-to-gas in electricity markets dominated by renewables. The business case of a power-to-gas plant that is producing hydrogen is evaluated by determining the willingness to pay for electricity and by comparing this to the level and volatility of electricity prices in a number of European day-ahead markets. The short-term willingness to pay for electricity depends on the marginal costs and revenues of the plant while the long-term willingness to pay for electricity also takes into account investment and yearly fixed operational costs and therefore depends on the expected number of operating hours. The latter ultimately determines whether or not large-scale investments in the power-to-gas technology will take place.
Keywords: Power-to-gas; Electricity markets; Hydrogen; Willingness to pay (search for similar items in EconPapers)
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