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2969. Market effects of Power-to-Gas technologies and their role under future gas supply shocks using a coupled electricity-gas-hydrogen market model
Invited abstract in session TA-9: Decentralized multi-energy markets, stream Energy Markets.
Tuesday, 8:30-10:00Room: 10 (building: 116)
Authors (first author is the speaker)
| 1. | Yi Wan
|
| PAUL SCHERRER INSTITUT | |
| 2. | Tom Kober
|
| Paul Scherrer Institute | |
| 3. | Russell McKenna
|
| Laboratory for Energy Systems Analysis, Paul Scherrer Institute | |
| 4. | Martin Densing
|
| Energy Economics, PSI |
Abstract
Power-to-Gas (P2G), by converting surplus electricity to hydrogen using electrolysers, will be a crucial component in the future low-carbon energy system. This study investigates the market impacts of large-scale P2G deployment, with a specific focus on electrolysers and hydrogen storage, under a stringent climate scenario. We develop a game-theoretic equilibrium model of coupled day-ahead electricity, natural gas, and hydrogen markets for the Central Western Europe region. One novelty of this model is that we consider multiple hydrogen supply pathways, including national imports, elastic hourly hydrogen demand, and external costs of hydrogen blending in the representation of the (potential) wholesale hydrogen market.
Besides lowering hydrogen market prices and increasing electricity market prices, electrolysers may also increase electricity price volatility due to overlapping peak-load periods for electricity and hydrogen. The analysis of hydrogen storage highlights its role in mitigating general market volatility, albeit with only modest impacts on electricity markets, which indicates its limited potential to provide flexibility to the electricity market. Additionally, hydrogen storage may increase natural gas and hydrogen prices through its interaction with Steam Methane Reforming. This study contributes to the existing literature by providing insights for the effects of P2G on future energy markets in terms of intricate market dynamics and interactions induced by P2G.
Keywords
- Electricity Markets
- Energy Policy and Planning
- OR in Energy
Status: accepted
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