Stochastic techno-economic analysis of power-to-gas technology for synthetic natural gas production based on renewable H2 cost and CO2 tax credit

Abstract

Power-to-gas (P2G) has been proposed as an innovative energy storage system for a long period of time to manage unbalanced electricity generated from renewable energy. Here we report economic feasibility studies and uncertainty analysis of P2G technology for synthetic natural gas (SNG) production in Korea. Economic analysis in terms of itemized cost estimation was carried out based on capital cost and operating cost, and then a unit SNG production cost of 0.094 USD kWh−1 was obtained for a SNG production capacity of 700 m3 h−1, which is still higher than a conventional natural gas price in Korea (0.038˜0.069 $ kWh−1). With a Monte-Carlo simulation method, uncertainty analysis was performed to predict the possible changes in a unit SNG production cost and a net present value due to fluctuating the renewable H2 cost (1.84˜2.76 USD kgH2 −1), CO2 capture cost (48˜111 USD tonCO2 −1), and CO2 tax credit (16˜24 USD tonCO2 −1) as a tool of quantifying risks associated with a premature P2G technology. The analysis confirmed the economical infeasibility of P2G technology in Korea requiring significant advancement in P2G technology and stability in CO2 tax credit and also suggesting a future drive for the detailed analysis of environmental impacts considering the life cycle of produced SNG.