Paving the way for Renewable Power-to-Gas (P2G) The case of non-individual transport David de Jager Operating Agent IEA RETD TCP Revitalising local economies with renewable energy Koriyama-city, Fukushima, Japan 1 September 2016
RE-PROSUMERS RE-P2G Study Research questions: Which P2G technologies are promising? Which policy instruments are required for their uptake? Objective Approach PSG IB To prepare a technology assessment of current and future P2G options for use in commercial vehicles Market analysis and total cost of ownership (TCO) modeling of P2G options compared to competitive vehicle technologies DLR, BMWI, NRCan, IEA HIA, CEA, VTT, DGEC ENEA Consulting, Fraunhofer IWES Published June 2016 Timeframe January to June 2016 www.iea-retd.org 2
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 3
Background Non-individual / commercial sector has a 21 % share of German transport sector energy consumption 2% 1% 2% 4% 3% 9% Vans and trucks < 7.5 tons make up about half of commercial sector s emissions 79% Individual passenger cars Vans (<=3,5 t) Trucks (3,5-7,5 t) Trucks (7,5-14t) Trucks (14-20 t) Trucks (>20 t) Buses and coaches Individual cars: 37 Mio, vans <= 3,5 t: 2.1 Mio., trucks < 7.5 t: 0.24 Mio., buses: 0.078 Mio. www.iea-retd.org 4
Approach The competitiveness of P2G-mobility was assessed compared to alternative mobility options on a given market segment 1) Qualitative analysis of market segments Market segments were defined as combination of vehicle types and purposes: E.g. City buses, coaches, captive fleets of light duty vehicles, city and rural delivery, long haul trucks, vocational trucks Criteria to choose the cases to be modelled: Applicability of air and noise pollution regulation on the market segment Power of public authorities on the market segment Share of fuel consumption of the market segment Competition with other alternative technologies on the market segment Development stage of hydrogen and SNG mobility on the market segment 2) Detailed modelling of the Total Cost of Ownership (TCO) of the P2G vehicle Fuel production, infrastructure, vehicle, possible financial incentives 3) Comparison with TCOs of competing options www.iea-retd.org 6
Overview of case studies modeled Market segment: City transit bus 350 bar 1MWel Electrolyser H 2 @ 10 bar H2-RS H 2 @ 350 bar FCEV bus fleet 10MWel Electrolyser H 2 @ 10 bar Methanation & compression SNG @ 60 bar Injection station Grid CNG-RS SNG @ 200 bar CNG bus fleet CO2 @ 10 bar SNG @ 40-60 bar 200 bar Market segment: City delivery of goods 700 bar 1MWel Electrolyser H 2 @ 10 bar H2-RS H 2 @ 700 bar FCEV city truck 10MWel Electrolyser H 2 @ 10 bar Methanation & compression SNG @ 60 bar Injection station Grid CNG-RS SNG @ 200 bar CNG city truck SNG @ 40-60 bar 200 bar CO2 @ 10 bar Market segment: LDV Captive fleets 350 bar 1MWel Electrolyser H 2 @ 10 bar H2-RS H 2 @ 350 bar RE-FCEV LDV captive f. 10MWel Electrolyser H 2 @ 10 bar Methanation & compression SNG @ 60 bar Injection station Grid CNG-RS SNG @ 200 bar CNG LDV captive f. SNG @ 40-60 bar 200 bar CO2 @ 10 bar www.iea-retd.org 8
Methodology for TCO modeling 2015 Based on French market data and available data on powertrain technologies for the 2015 scenario Main Hypotheses: Cost of capital: 8% Production and Refueling station 100% load factor (there are enough vehicles to fully use the capacity of the P2G station) CAPEX: 2015 costs Electricity price Wholesale price: 40 /MWh Grid fee: 20 /MWh Tax exemption on electricity Fuel prices Diesel price: 1.21 /l NG price: 20.43 /MWh + 4.34 /MWh tax BioCH4 price: 82.74 /MWh P2G: production + delivery ( /MWhHHV) Travelled distances: short - long Captive LDVs: 12,500 62,500 km/year City Buses: 39,000 78,000 km/year City Delivery Trucks: 16,000 32,000 km/year Included in TCO calculation: Vehicle costs: List price ( ) Maintenance ( /100km) Insurance and Battery rental (for LDVs) ( /year) Fuel costs Taxes: VAT and taxes on diesel and CNG Not included in TCO calculations: Fuel taxes on SNG and H2 Vehicle Subsidies and Registration costs Adblue cost for diesel vehicles Parking and Toll costs (long distance) Resale value Battery charging infrastructure www.iea-retd.org 9
Methodology for TCO modeling 2030 Hypotheses for 2030 scenario relative to 2015 scenario P2G production: Load Factor of P2G assets : 2000 hours (power is renewably sourced) Electrolyzer efficiency: +7.5% Electrolyzer CAPEX: -30% Methanation reactor CAPEX: -50% Compressors CAPEX: -10% Injection Station CAPEX: -20% P2G distribution H2 refueling stations: -40% Environment Carbon price: 100 /tco2 (20 /t assumed in 2015) Electricity price: 30 /MWhe Wholesale electricity price: 10 /MWhe Grid Fee: 20 /MWhe Tax exemption on electricity Vehicle costs: Diesel vehicles: constant price between 2015 and 2030 H2 vehicles learning rates: 22% until 2020 6% between 2020 and 2030 Battery rental for range extended vehicles: constant between 2015 and 2030 CNG vehicles: 2030 price equal to 2015 diesel price www.iea-retd.org 10
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 11
Approach Most promising market segments were modelled in detail: Light Duty Vehicles (LDV), buses, and city delivery trucks www.iea-retd.org 12
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles (LDV) Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 13
Total Cost of Ownership CO2 emissions (kg/100km) Total Cost of Ownership (TCO) analysis 2015 On short distances, battery-electric Light Duty Vehicles (LDVs) outcompete P2G LDVs Short range captive light duty vehicles - Market Uptake - 2015 240 k 20 Vehicle Refueling station 180 k 15 Gas Grid Injection station Pipeline 120 k 60 k 37 k +17% 43 k +35% 50 k +130% 84 k +127% 84 k +87% 69 k +23% 45 k 10 5 SNG compression Methanation reactor CO2 Electrolysis Power grid connection 0 k - Power Fuel Diesel LDV CNG LDV BioCH4 LDV Range extended LDV Full H2 LDV SNG LDV Electric LDV CO2 emissions www.iea-retd.org 14
Total Cost of Ownership CO2 emissions (kg/100km) Total Cost of Ownership (TCO) analysis 2015 For long ranges, range-extended Light Duty Vehicles (LDV) are already close to bio-methane Long range captive light duty vehicles - Market Uptake - 2015 240 k +197% 200 k 20 Vehicle Refueling station 180 k 120 k 68 k 71 +5% k 104 +54% k 113 +67% k 133 +98% k 15 10 Gas Grid Injection station Pipeline SNG compression Methanation reactor CO2 60 k 5 Electrolysis Power grid connection 0 k - Power Fuel Diesel LDV CNG LDV BioCH4 LDV Range extended LDV Full H2 LDV SNG LDV CO2 emissions Share of infrastructure and electricity costs is rather low for range-extended LDVs. Full H2 requires higher pressure tank systems and more electricity. www.iea-retd.org 15
Total Cost of Ownership CO2 emissions (kg/100km) Total Cost of Ownership (TCO) analysis 2030 In 2030, range-extended and full LDV are competitive for long range uses; the TCO of SNG remains high Long range captive light duty vehicles - Large scale deployment - 2030 240 k 180 k 120 k 60 k 0 k 78 k 77-2% k 83 +6% k 83 +6% k 65-17% k Diesel LDV CNG LDV BioCH4 LDV Range extended LDV Full H2 LDV +168% 210 k SNG LDV 20 15 10 5 - Vehicle Refueling station Gas Grid Injection station Pipeline SNG compression Methanation reactor CO2 Electrolysis Power grid connection Power Fuel CO2 emissions www.iea-retd.org 16
Preliminary conclusions Conclusions on LDV captive fleets There is a business case for range extended H2 fleets in the short run The most promising option is the development of long range fleets BEV cannot compete on these distances due to their limited ranges The vehicle technology is already mature but policy measures should still be targeted at reducing the cost of hydrogen vehicles through: Subsidies And or tax exemptions SNG would need expensive policy measures to be made competitive Electricity purchase conditions are not in favor of the SNG path due to its low energy efficiency www.iea-retd.org 17
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 18
Total Cost of Ownership CO2 emissions (kg/100km) Preliminary TCO analyses 2015 H2 inter-city buses have a TCO about three times higher than diesel buses, mainly because of the vehicle costs Long range inter-city buses - Market Uptake - 2015 2 000 k 1 +184% 648 k 1 +220% 869 k 160 Vehicle Refueling station 1 500 k 120 Gas Grid Injection station Pipeline 1 000 k 910 +55% k 80 SNG compression Methanation reactor 500 k 591 k 579-2% k 40 CO2 Electrolysis Power grid connection Power 0 k Diesel Bus CNG Bus BioCH4 Bus H2 Bus SNG Bus - Fuel CO2 emissions www.iea-retd.org 19
Total Cost of Ownership CO2 emissions (kg/100km) Preliminary TCO analyses 2030 By 2030 H2 buses are still 40% more expensive than diesel buses while SNG buses will remain even more expensive Long range inter-city buses Large scale deployment - 2030 2 000 k 1 +198% 974 k 160 Vehicle Refueling station 1 500 k 120 Gas Grid Injection station Pipeline 1 000 k 500 k 702 k 642-9% k 706 +1% k 894 +39% k 80 40 SNG compression Methanation reactor CO2 Electrolysis Power grid connection Power 0 k Diesel Bus CNG Bus BioCH4 Bus H2 Bus SNG Bus - Fuel CO2 emissions CO2 tax of 450 /tco2 in 2030 would be required to make H2 buses competitive. www.iea-retd.org 20
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Inter-city Buses Long-range City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 22
Total Cost of Ownership CO2 emissions (kg/100km) TCO analyses 2015 H2 and SNG long range delivery trucks are currently at par in terms of competitiveness Long range city delivery trucks - Market Uptake - 2015 600 k 521 k 529 k +199% +203% 100 Vehicle Refueling station 450 k 75 Gas Grid Injection station 300 k 276 +58% k 50 Pipeline SNG compression 150 k 174 k 188 +8% k 25 Methanation reactor CO2 Electrolysis Power grid connection 0 k Diesel City Delivery CNG City Delivery BioCH4 City Delivery H2 City Delivery SNG City Delivery - Power Fuel CO2 emissions www.iea-retd.org 23
Total Cost of Ownership CO2 emissions (kg/100km) TCO analyses 2030 By 2030 H2 delivery trucks are still 35% more expensive than diesel buses; SNG delivery trucks will remain very expensive Long range city delivery trucks - Large scale deployment - 2030 600 k 539 +165% k 100 Vehicle Refueling station 450 k 75 Gas Grid Injection station 300 k 150 k 203 k 188-8% k 204 +1% k 272 +34% k 50 25 Pipeline SNG compression Methanation reactor CO2 Electrolysis Power grid connection 0 k Diesel City Delivery CNG City Delivery BioCH4 City Delivery H2 City Delivery SNG City Delivery - Power Fuel CO2 emissions CO2 tax of 430 /tco2 in 2030 would be required to make H2 trucks competitive. www.iea-retd.org 24
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 26
Technical-economic features of P2G infrastructure P2G plants must operate under the double constraint of: - high load factors, and - using near to 100% renewable electricity A large portion of fuel costs for P2G vehicles come from production infrastructure CAPEX: Producing H 2 during 2,000 hours/year with free electricity is more expensive than producing H 2 during 8,600 hours/year with a 60 /MWh electricity A high load factor is thus required to limit fuel costs (typically more than 5,000 hours/year). At the same time, P2G emissions depend on the carbon footprint of the electricity used for electrolysis: P2G vehicles emit less CO 2 than diesel vehicles when the carbon footprint of the electricity used is less than 180 kgco 2 /MWh www.iea-retd.org 27
Vehicle emissions In kg of CO2/100km H2 vs. SNG Power-to-gas must be based on full or close to full renewable electricity. 120 100 80 To be less emissive than diesel, grid power-to- SNG requires an electricity carbon footprint three times lower than grid power-tohydrogen 60 40 20 FCEV SNG Diesel 0 Germany (461) Ireland (458) UK (457) Japan (416) Denmark (360) Canada (186) France (61) Norway (13) Countries (2011 Carbon footprint of grid electricity in kg of CO2/MWh) www.iea-retd.org 28
Technical-economic features of P2G infrastructure A very high penetration of RES is required to make renewable power-to-gas affordable in the long term At small scale, high load factors and renewable electricity should not be the main concern: Fuel costs only represent a limited portion of total costs compared to vehicle cost (even though P2G production infrastructure represents a large portion of fuel costs) Renewable power-to-gas can be achieved through the purchase of renewable certificates But when deployed at large scale, renewable P2G production becomes an issue: The price of renewable certificates would greatly increase due to higher demand With decreased vehicle costs, fuel costs become an important part of the TCO of vehicles P2G would add significant base demand to the grid if it ran at a 100% load factor P2G infrastructure should thus run on excess RES-E and play a stabilizing role for the grid. A very high penetration of RES-E is required to offer long hours of excess RES-E to maintain a sufficient load factor. www.iea-retd.org 29
Technical-economic features of P2G infrastructure Hydrogen production tends to be decentralised while SNG can be produced in a centralised configuration Hydrogen should be produced as close as possible to the demand There is no H2 transportation infrastructure H2 transport by truck (tube trailer) is expensive Electrolysis process can be easily decentralised (modular process with limited gains on scale effect above 5 to 10MW el ) In practice, the optimum between scale, number of production units and distance of transport to demand sites must be found for each demand area In most areas covered in the geographical scope of the study, SNG benefits from natural gas transportation infrastructures SNG production and delivery sites can be connected by the natural gas distribution and transmission grids and transport would be cost-effective www.iea-retd.org 30
Technical-economic features of P2G for mobility Hydrogen refuelling stations addressing several types of vehicle will maximise chances to reach economic viability Size and load factor significantly impact the economic viability of refueling stations (amortization of CAPEX) 200 kg H2 /day is considered as the minimum capacity required to reach breakeven with current CAPEX This corresponds to an electrolyser of 500 kw el and a fleet of 500 LDVs Refueling stations dedicated to captive fleets or specific market segments without sufficient demand have few chances to reach breakeven www.iea-retd.org 31
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 32
Policy options P2G mobility requires an ambitious regulatory framework in favour of renewable mobility More ambitious constraints are needed in shares of RES in transport Renewable P2G mobility will hardly compete with other options (fossil, BEVs, biomethane) It is not likely to be the first renewable mobility option to be used to reach current targets/constraints in Europe Energy suppliers and vehicle manufacturers will turn to P2G technologies if constraints are high enough to make the cheapest options (diesel) insufficient to reach CO2 targets/constraints Renewable certificates for fuels produced from power are needed to ensure and monitor the development of fully renewable P2G RE targets should be set at distribution infrastructure level A certification scheme for renewable power-to-gas will be needed www.iea-retd.org 33
RE-P2G Agenda Background / Approach Most promising segments Captive Light Duty Vehicles Buses City delivery trucks P2G infrastructure Policy options Conclusions www.iea-retd.org 40
Conclusions P2G can help decarbonize the transport sector provided it relies on hydrogen and close to fully renewable electricity Renewable P2G mobility can hardly compete with fossil, BEVs, biomethane Policy support and subsidies are needed P2G mobility should focus on hydrogen and long ranges Power-to-hydrogen is more energy- and cost-efficient than power-to-sng Strategy for early adoption should focus on captive fleets of LDVs LDVs represent the highest share of CO 2 emissions after passenger cars Hydrogen LDVs can become competitive at an acceptable cost Buses and trucks do not show a viable business case even in the future Ambitious, binding RE transport targets required (making diesel a non-option) High shares of renewable electricity needed for truly renewable P2G Non-individual transport can pave the way for renewable power to gas www.iea-retd.org 41
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