Site-dependent levelized cost assessment for fully renewable Power-to-Methane systems

Abstract The generation of synthetic natural gas from renewable electricity enables long-term energy storage and provides clean fuels for transportation. In this article, we review the economic challenges for synthetic natural gas and introduce a high-resolution optimization model for decentralized Power-to-Methane plants. The model optimizes both the system layout and its operation including renewable power generation. The optimization yields the levelized costs per kWh of synthetic natural gas. We find that costs vary between 0.24 and 0.30 €/kWh depending on the local availability of renewable energy resources. The optimum renewable generation mix typically features much more wind than solar power, and the use of battery electric storage systems has only minor effects on levelized costs. We further discuss how the economic competitiveness of Power-to-Methane systems can be improved by the technical developments and by the use of co-products, such as oxygen and curtailed electricity.