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The role of power-to-gas in the future energy system: Market and portfolio effects

Bertsch, Valentin and Lynch, Muireann and Devine, Mel (2019) The role of power-to-gas in the future energy system: Market and portfolio effects. Energy, pp. 1197-1209. Elsevier. doi: 10.1016/j.energy.2019.07.089. ISSN 0360-5442.

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Official URL: https://www.sciencedirect.com/science/article/abs/pii/S0360544219314306?via%3Dihub


Electricity systems based on renewables have an increasing demand for flexibility. This paper considers the potential of power-to-gas to provide flexibility and enhance System integration of renewables. Existing research on power-to-gas typically analyses the system effects of a predetermined power-to-gas unit without endogenising the investment decision. Moreover, insights related to market and Portfolio effects of power-to-gas are rare. To this end this work presents a stochastic electricity market model. Market players considered include generating firms with different generation portfolios and different consumer groups. Firms earn revenues from an energy market, a capacity market and a feed-in premium for renewable generation. They maximise their profits by optimising the operation of existing assets and investing in new generation assets and power-to-gas. Firms with renewable generation benefit from investing in power-to-gas. While the technology itself is loss-making, power-to-gas particularly increases demand and hence prices in low-load hours. Therefore, renewable generation becomes more profitable, which justifies the investment. Metrics such as LCOE, which consider each technology in isolation, fail to capture this effect. The increase in the electricity Price results in higher costs to consumers and so the Overall transfer from consumers to wind generators increases in the presence of power-to-gas.

Item URL in elib:https://elib.dlr.de/128934/
Document Type:Article
Title:The role of power-to-gas in the future energy system: Market and portfolio effects
AuthorsInstitution or Email of AuthorsAuthor's ORCID iD
Bertsch, ValentinGerman Aerospace Center (DLR)UNSPECIFIED
Date:15 October 2019
Journal or Publication Title:Energy
Refereed publication:Yes
Open Access:No
Gold Open Access:No
In ISI Web of Science:Yes
DOI :10.1016/j.energy.2019.07.089
Page Range:pp. 1197-1209
Series Name:Elsevier Energy
Keywords:The role of power-to-gas in the future energy system: Market and portfolio effects
HGF - Research field:Energy
HGF - Program:Technology, Innovation and Society
HGF - Program Themes:Renewable Energy and Material Resources for Sustainable Futures - Integrating at Different Scales
DLR - Research area:Energy
DLR - Program:E SY - Energy Systems Analysis
DLR - Research theme (Project):E - Systems Analysis and Technology Assessment (old)
Location: Stuttgart
Institutes and Institutions:Institute of Engineering Thermodynamics > Energy Systems Analysis
Deposited By: Borovleva, Tatiana
Deposited On:16 Dec 2019 15:34
Last Modified:16 Dec 2019 15:34

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