Economic Analysis of Renewable Power-to-Gas in Norway

Rishabh Agarwal ()
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Rishabh Agarwal: The Wharton School, University of Pennsylvania, Philadelphia, PA 19104, USA

Sustainability, 2022, vol. 14, issue 24, 1-15

Abstract: The steep reduction in costs of electrolysis and methanation has made renewable power-to-gas much more affordable. Reeling from an energy crisis, Europe could use this technology for near-shoring production of clean and reliable synthetic natural gas (SNG) and end dependence on Russian gas. This article investigates the economic feasibility of producing SNG in Norway, which has amongst the cleanest and cheapest electricity production in Europe. It is found that SNG can be produced for 141 €/MWh at a 10 MW electrolyzer facility in 2023; and for 108 €/MWh at a larger 100 MW electrolyzer facility in 2030. The relevance of these prices is discussed in the context of the current and future European gas markets, and recommendations are made to reduce the production costs even further.

Keywords: synthetic natural gas; economic analysis; power-to-gas; Norway; Europe energy crisis; electrolysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
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