A Pragmatic Approach to the Economic Assessment of Green Synthetic Methane Power in the Baltics

Antans Sauhats, Roman Petrichenko () and Marija Zima-Bockarjova
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Antans Sauhats: Faculty of Electrical and Environmental Engineering, Institute of Power Engineering, Riga Technical University, 1048 Riga, Latvia
Roman Petrichenko: Faculty of Electrical and Environmental Engineering, Institute of Power Engineering, Riga Technical University, 1048 Riga, Latvia
Marija Zima-Bockarjova: ABB Electrification, ABB Switzerland Ltd., Bruggerstrasse 72, 5400 Baden, Switzerland

Energies, 2023, vol. 16, issue 22, 1-26

Abstract: The synthesis of methane from hydrogen and carbon dioxide creates an energy resource that is suitable for long-term storage. Once this process is powered by renewable electricity, it produces a clean fuel for producing electricity and heat and supports large-scale renewable energy deployment, energy transition and climate change mitigation. This paper proposes a pragmatic approach to assessing the economic potential of synthetic methane-based power. Today, natural gas plays an important role in the Baltic region due to the existing infrastructure, which includes a transmission and distribution pipeline network, gas power plants and a large underground storage reservoir. Replacing natural gas with synthetic methane would fulfil carbon emission reduction ambitions. In this paper, we simulate electricity producers’ actions at market conditions and consider the generation portfolio in the Baltics and the interconnections with Scandinavia and Poland operating in the NORDPOOL electricity market. As a result of these calculations, we obtain the volume of the synthetic gas, the production costs, the volume of gas storage, the installed capacity of the gas power plant, and the investments required to ensure energy transition and system adequacy. These results are essential for the informed decisions made by policymakers, investors and system operators.

Keywords: energy storage; electricity market; hydrogen and methane production; renewables; climate change mitigation (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
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