Power To Gas – More Than Just A Storage Solution

Power to Gas has a number of unique properties that are not shared by other storage solutions.
Published: Wed 17 Sep 2014

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Power to Gas (P2G) is traditionally presented as a way of storing renewable electricity on the gas grid. However, it does a lot more than that, explains Benoit Decourt, Manager at Schlumberger, SBC Energy Institute, who will be one of the presenters at Engerati’s upcoming webinar, Examining the business case of Power-to-Gas on14 October.

His co-presenter, Filip Smeets, General Manager On-Site Generation at Hydrogenics, lists P2G’s innovative approach to energy storage and points to the solution’s unique properties:

  • Higher capacity - compensating for several weeks of windless or cloudy conditions. Other storage solutions can offer only hourly or maximum daily storage capacities.

  • Lower system cost - reducing new and leveraging existing infrastructure investment. This eliminates the need for an infrastructure which is sized for peak demand, mitigating grid enhancement investments, utilizing an existing gas network to store and transport,etc.

  • More versatile - end-use is not limited to re-electrification. The stranded excess renewable electricity can be converted to a chemical energy carrier, hydrogen, and utilize in the transport, heating or industry sectors.

  • Broader sustainability– pools and greens all energy markets as it interconnects the four main energy silo’s: electricity, mobility, heat and industrial sectors.

Says Decourt, “P2G is more than storage. The energy system must be considered as a whole and not as silos. P2G may have the potential to play a central role as it is the bridge between electricity generated by wind and solar and the energy system.”

How does P2G compare?

While the applicability of a technology will always be location-specific to some extent, it is possible to make general observations about the suitability of storage technologies for services such as frequency reserve, time shift, transmission and distribution upgrade deferral:

  • Batteries (Lead, Lithium, Flow, NaS) can typically react and change their rate of charge or discharge very fast. This makes them well suited for the provision of frequency reserve. Location flexibility, scalability and transportability make batteries a good fit for transmission and distribution upgrade deferral. Maximum storage time at rated capacity for batteries is typically on the order of hours, making them suitable for daily time shift but less suited for time shift over longer periods. Flow batteries, with their scalable energy capacity, are an important exception in this respect.

  • Mechanical storage technologies (pumped hydro, compressed air, liquid air) can usually react fast enough to provide secondary and tertiary frequency reserve services. Unlike batteries, these technologies are built on “utility” scale with typically-rated power capacity in the tens or hundreds of MW. Their maximum storage time is limited by the space in which the storage medium (water or air) can be stored and can reach hours or days. This makes mechanical storage suitable for daily time shift as well as longer-term time shift applications.

  • Water electrolysers producing hydrogen can change their load quickly. As a result, they can provide negative frequency reserve by increasing output. If they are operating, they can also provide positive reserve power by reducing output. A combination of electrolyser with hydrogen storage and a CCGT power plant or fuel cell can also provide time shift. Very large potential storage capacity (especially in the case of underground storage) also makes hydrogen storage applicable for longer duration time-shift applications. Outside of the power sector, hydrogen can be used for mobility, in the gas grid or in the industry.

A game changer

But will P2G be a real game changer in the energy industry? Smeets says that it will be since it is the only technology that can support the penetration of renewable energy sources in such a way that it avoids the shedding of vast amounts of stranded excess renewable energy by de-carbonizing the mobility, heat and industrial sectors. Decourt says that while P2G is a very appealing solution, its developments will depend on economics, market conditions and regulatory framework.

We asked both presenters whether the right energy mix and demand side management solution could replace the use of energy storage and Decourt explained that when it comes to energy, there isn’t a single correct solution. Whether or not energy storage is critical is dependent on the particular system in question and it has to be put in perspective of the competitiveness with alternatives including demand-side management, market interconnection, back up plants and even curtailment. However, electricity storage is becoming increasingly relevant to help integrate renewables that are flow energy, in contrast to stock energy such as gas or coal power plants that store potential energy in the form of gas or coal.

He adds, “The developed, interconnected system will call for energy storage. The question is not whether it’s critical but how competitive it is.”

Smeets says that energy storage is critical from a societal cost perspective: “If the world wants to avoid the catastrophic consequences (and cost) of global warming the right energy mix is close to 100% renewable. Since currently only the intermittent wind and solar sources have the potential to provide the capacity we need storage solutions to avoid to build again a new energy infrastructure geared towards peak demand instead of average demand.”

“A power network based on 50%+ intermittent wind and solar sources will results in vast amounts of excess green power that can be usefully converted to also de-carbonize transport, industry and heating with P2G. No other technology has this potential to integrate fully renewable sources into the entire enrgy landscape.”

Cost effectiveness of P2G

According to Smeets, the business case is highly sensitive to several factors, the most important of which include:

– The price of hydrogen realised in the market – electrolysers produce higher purity hydrogen than SMR and may command a purity premium for some applications.

– Additional storage and transportation costs

– Electrolyser lifetime and load factor

– The ability to provide frequency reserve services to the grid (electrolyser acting as controllable load) as this could increase the revenues of electrolyzer

– Introducing full final consumption electricity grid fees and levies

- The existence of green hydrogen certificates or FIT.

“In summary, positive business cases for grid-connected electrolysers producing hydrogen may exist in suitable locations - where the need for on-site storage and further transportation are low - if the generated hydrogen is exempt from electricity grid fees and levies,” explains Smeets.

Decourt points out that P2G will struggle to compete with natural gas on a calorific basis. This is because hydrogen, produced from electrolysis – the first step from P2G –can be very expensive. “The probability of P2G and the return on investment is likely to depend on applications, and revenue streams. You will not be profitable by selling gas on a calorific value basis. There will have to be several revenue streams in place and this can be very complex because it requires very multidimensional optimisation which is lacking in the energy sector today.”

The challenges

The main challenge for P2G right now is economic rather than technical, explains Decourt. He says, “Technology, although in different development stages of maturity, does not appear to be a significant impediment to P2G development.” He adds that the main uncertainty lies in the scope of cost reduction on the one side and on the other side is the monetisation of benefits of P2G services.

Smeets points out that the main challenge is the disagreement and indistinctness on hydrogen tolerance of infrastructure and end-users. The effect of this is endless discussion about technology, safety and economics. There is also insufficient commitment toward P2G implementation which hampers technological and economical development.

The solution, according to Smeets, would be to implement a recommended practice for hydrogen accommodation in natural gas grids:

  • Providing engineering practice and guidance. This would address the “how to” questions

  • Technological approach: component & system level

  • Impartial guidance, recognized by operators and industry

Smeets explains, “This would help to prepare guidelines for TSO’s and DSO’s worldwide to support them in preparing their natural gas networks and operations for the injection of hydrogen (pure and as a gas component) with acceptable consequences. They should lay down sound engineering practice and guidance on the measures to be taken to ensure that the considered hydrogen injection in the natural gas system can be done with acceptable consequences.”

Government support

There is a growing interest in electricity storage around the world. Decourt says that there is a real momentum for energy storage and the evidence of this is the initiatives, created in the UK and US, in support of storage. The International Energy Agency is also showing a great deal of support for the development of P2G.

There is a need to act now to ensure that regulation removes the obstacles that prevent storage from participating on a level playing field with other flexibility options, explains Smeets. He lists the leading obstacles:

1. Lack of regulatory acknowledgement of storage as a specific component of the electric power value chain

2. Application of final consumption fees to storage, even though storage does not constitute final use of the energy

3. Payments for curtailment to wind and solar producers, without an incentive to encourage productive use of the curtailed electricity

4. Lack of clarity on rules under which storage can access markets

5. Regulatory changes are also required to recognize the contribution of renewable hydrogen produced by electrolysis to meeting EU GHG targets through a tariff or inclusion of renewable hydrogen into renewable fuel standards and targets

Says Smeet, “Furthermore, a support scheme will be necessary to help storage solutions navigate through the valley of death safely and deliver viable return on investment without public support eventually.”