Power-to-Gas as an Emerging Profitable Business through Creating an Integrated Value Chain

Power-to-gas (PtG) technology has received considerable attention in recent years. However, it has been rather difficult to find profitable business models and niche markets so far. PtG systems can be applied in a broad variety of input and output conditions, mainly determined by prices for electricity, hydrogen, oxygen, heat, natural gas, bio-methane, fossil CO2 emissions, bio-CO2 and grid services, but also full load hours and industrial scaling. Optimized business models are based on an integrated value chain approach for a most beneficial combination of input and output parameters. The financial success is evaluated by a standard annualized profit and loss calculation and a subsequent return on equity consideration. Two cases of PtG integration into an existing pulp mill as well as a nearby bio-diesel plant are taken into account. Commercially available PtG technology is found to be profitable in case of a flexible operation mode offering electricity grid services. Next generation technology, available at the end of the 2010s, in combination with renewables certificates for the transportation sector could generate a return on equity of up to 100% for optimized conditions in an integrated value chain approach. This outstanding high profitability clearly indicates the potential for major PtG markets to be developed rather in the transportation sector and chemical industry than in the electricity sector as seasonal storage option as often proposed. (C) 2015 The Authors. Published by Elsevier Ltd.