Perspectives of Power-to-X technologies in Switzerland · SCCER Joint Activity 7 supportearning-by l using P2X technolo-giesprehensive in com project setups cov-ering complete P2X

Perspectives of Power-to-X technologies in Switzerland

A White Paper

July 2019

HSRHOCHSCHULE FÜR TECHN I KRAPP E RS WI L Supported by:

Innosuisse – Swiss Innovation Agency

Swiss Federal Office of Energy

Perspectives of Power-to-X technologies in Switzerland

A White Paper

July 2019

T. Kober1, C. Bauer1 (eds.), C. Bach2, M. Beuse3, G. Georges4, M. Held4, S. Heselhaus8, P. Korba5, L. Küng4, A. Malhotra3, S. Moebus6, D. Parra7, J. Roth1, M. Rüdisüli2, T. Schildhauer1, T.J. Schmidt1, T.S. Schmidt3, M. Schreiber8, F.R. Segundo Sevilla5, B. Steffen3, S.L. Teske2

1 Paul Scherrer Institute (PSI)2 Swiss Federal Laboratories for Materials

Science and Technology (EMPA)3 ETH Zurich, Department of Humanities, Social

and Political Sciences, Energy Politics Group4 ETH Zurich, Department of Mechanical and

Process Engineering, Institute for Energy Technology, Aerothermochemistry and Combustion Systems Laboratory

5 Zurich University of Applied Sciences (ZHAW), School of Engineering

6 Hochschule für Technik Rapperswil (HSR), Institute for Energy Technology

7 University of Geneva, Institute for Environmental Sciences

8 University of Lucerne, Faculty of Law

2. EditionDOI 10.3929/ethz-b-000352294

SCCER Joint Activity 5

Contents

Synthesis 7

1 Preface and introduction 8

2 What is Power-to-X? 92.1 Basicprinciple 9

2.2 Electrolysis 9

2.3 Synthesisofmethane,otherhydrocarbons

orammonia 10

2.4 Stageofdevelopment 11

2.5 Infrastructure 11

3 Why Power-to-X in Switzerland? 123.1 Greenhousegasemissionsandclimate

change 12

3.2 Increasingrenewablepowergeneration 12

3.3 Needforflexibilityoptions 12

4 Flexibility as an important element in climate change mitigation 144.1 ThreecorebenefitsofP2X 14

4.2 P2Xasanimportantelementinfuture

energyscenarios 15

5 Costs of Power-to-X 165.1 LevelizedcostsofP2Xproductstoday 16

5.2 Power-to-Hydrogen 17

5.3 Power-to-Methane 18

5.4 Power-to-X-to-Power 18

5.5 Power-to-Liquids 19

6 Climate change mitigation related benefits 206.1 LifeCycleAssessment(LCA)considerations 20

6.2 CO2sources 20

7 Power-to-X and the Swiss electricity market 227.1 P2Xasserviceprovider 22

7.2 P2Xaselectricitystorageoption 22

7.3 GridstabilizationviaP2X 23

8 Power-to-X and the Swiss gas market 258.1 Sytheticmethane 25

8.2 Hydrogen 25

9 Power-to-X and the transport sector 279.1 Aviation 27

9.2 Roadtransport 27

10 Power-to-X in industry 3010.1 Theroleofhydrogen 30

10.2 Swissindustry 30

11 Integration of Power-to-X in multiple markets 31

12 Power-to-X and innovation policy 3212.1 Strengtheningthedomesticmarket 32

12.2 Interactionbetweenproducersandusers 32

13 Legal aspects related to Power-to-X 3313.1 Generalregulations 33

13.2 StatusofP2Xsystemsasfinalconsumers

andpowerplants 33

13.3 P2Xasgridinvestment 33

13.4 Unbundlingrules 33

13.5 Gasmarketregulations 33

13.6 Regulationsregardingthetransportsector 33

13.7 Regulationsregardingtheheatingsector 33

13.8 Regulativeimpactonbusinessmodels 34

14 Acknowledgements 35

15 Abbreviations 35

16 Glossary 36

17 References 38

6 SCCER Joint Activity

TheSwissenergysystemisfacingsubstan-

tial transformation and associated chal-

lenges:Whilenuclearpowerplantswillbe

gradually phased out, power generation

fromphotovoltaicsandwindissupposedto

(partially)filltheresultinggap.Atthesame

time,theenergysystemisexpectedtore-

duceitscarbon-dioxide(CO2)emissionsin

ordertomeetclimategoalsinlinewiththe

ParisAgreementoflimitingtheglobaltem-

perature increase to well below 2°C com-

pared to pre-industrial level. For Switzer-

land, this means specifically to replace

fossilfuelsinthemobilitysectoraswellas

forheating.

Anelectricitysystemlargelybasedonin-

termittentrenewablesneedstemporalflex-

ibility options buffering generation and

demand.Oneofthoseflexibilityoptionsis

“Power-to-X”(P2X):Thistermdescribesthe

electro-chemical conversion of electricity

into gaseous or liquid energy carriers or

industrial feedstocks. This White Paper

therefore covers P2X electrochemical pro-

cesses,butnottheuseofelectricityfordirect

heatgeneration (power-to-heat).Thecon-

version process starts with electrolysis of

water(Figure1.1).Thehydrogengenerated

fromelectrolysiscaneitherbedirectlyused

asfuel,or–incombinationwithCO2from

different sources – it can be further con-

vertedintosyntheticfuels,suchasmethane

orliquidhydrocarbons.Hydrogenandsyn-

theticfuelscandirectlyreplacefossilfuels

forheating,mobilityorelectricitygenera-

tionandcantherebyreduceCO2emissions.

However,oneneedstoconsidertheentire

P2Xconversionchaintoassesshowmuch

CO2iseffectivelyreduced.Inparticular,the

levelofachievableCO2emissionsreduction

mainlydependsontheCO2emissionsasso-

ciatedwiththeelectricityusedforelectrol-

ysis. Promising P2X options in the Swiss

contextaretheuseofhydrogeninfuelcell

vehicles and the generation of synthetic

methanereplacingnaturalgasasheating

andtransport fuel. In themobilitysector,

synthetic fuels can become important in

particular for long-distance, heavy-duty

transportwheredirectelectrificationwith

battery technologies faces severe limita-

tions.BothhydrogenandSNGcanalsobe

convertedbackintoelectricity.

Hydrogen, methane and liquid hydrocar-

bonscan–asopposedtoelectricity–easily

be stored over long time periods comple-

menting other short-term energy storage

optionsforanadvancedintegrationofpho-

tovoltaics and wind energy. Provided that

theselongtermstorageoptionsareavailable

forP2Xproducts, theoptionofseasonally

matchingelectricityproductionandenergy

demandrepresentsanimportantbenefitof

P2X;itcanalsoprovideservicesforelectric-

itygridstabilisation.Assuch,thevalueof

P2Xtechnologiesunfoldsinthecombination

of its multiple benefits that relate to in-

creasedtemporalflexibilityprovidedtothe

electricitysystem,theproductionofpoten-

tiallycleanfuelsforenergyend-users,and

thereductionofCO2emissionsthroughthe

useofCO2for theproductionofsynthetic

fuels replacingfossil fuels.However,each

oftheconversionstepsinvolvedinP2Xtech-

nologycomesalongwithenergylosses.

Sinceenergylossesareassociatedwithcosts

and also due to the fact that some of the

processes involved in P2X are still in the

developmentphase,costsofP2Xproducts

arecurrentlyhigh.Akeyfactorforthecom-

petitivenessofP2Xreferstotheprovision

ofelectricityatlowestpossiblecosts.Asa

technologythatenablestheinterconnection

ofdifferentenergysupplyandconsumption

sectors (sector coupling technology), it is

importantforasuccessfulmarketintegra-

tionofP2Xtechnologytobeabletogenerate

revenuesindifferentmarkets.Undersuita-

bleboundaryconditions,economiccompet-

itiveness could be achieved in the future.

Suchapositivedevelopmentdependsona

numberofkeyfactors:

• Reachingtechnologydevelopmentgoals

andreducinghardwarecosts,

• A broad rollout of fuel cell or synthetic

methane vehicles together with the re-

quiredfueldistributioninfrastructure,

• Aregulatoryframeworkthattreatselec-

tricitystoragetechnologiesandthusP2X

equally (especially with regard to grid

charges) and monetarises the environ-

mentalbenefitsofP2Xproducts(e.g.by

taxingCO2emissions).,

• TheidentificationofP2Xmarketoppor-

tunitiesindifferentsectorsandtheuse

ofoptimalsitesforP2Xunitswithaccess

tolow-costrenewableelectricityandCO2

sources.

Based on the existing knowledge, a few

recommendations supporting the imple-

mentationofP2XinSwitzerlandtargeting

policymakers,researchandotherstakehold-

ersseemappropriate:

• Ambitiousgoals fordomesticreduction

ofCO2emissionsarerequired

• Current ambiguities in the regulation

framework should be eliminated ac-

knowledging the benefits of P2X in the

electricity system as producer and con-

sumerofelectricity,

• UpscalingofpilotP2Xplantsshouldbe

supportedinordertoreachcommercial

unitsizes,

• Innovationpolicyshouldstrengthenthe

domestic market for P2X products and

Synthesis


supportlearning-byusingP2Xtechnolo-

giesincomprehensiveprojectsetupscov-

eringcompleteP2Xvaluechains,

• Clear rules for accounting for potential

environmental benefits of P2X fuels

shouldbeestablishedandthesebenefits

needtobemonetized,

• TheroleofP2XandtheoptimaluseofP2X

toachievelong-termenergyandclimate

goalsshouldbedeepenedinholisticstud-

ies (e.g. scenario analyses of the Swiss

Energy Strategy 2050), with particular

attentiontosystemintegrationandlocal

aspects(consumptionstructures,availa-

bilityofresourcesandinfrastructure).


ThisWhitePaperemanatesfromthecorre-

spondingprojectoftheJointActivityoffive

Swiss Competence Centers for Energy Re-

search(SCCER)fundedbytheSwissInnova-

tion Agency Innosuisse and the the Swiss

FederalOfficeofEnergy.Theobjectiveofthis

WhitePaperistocollectthemajorexisting

knowledgeonP2Xtechnologiesandtopro-

vide a synthesis of existing literature and

researchfindingsasbasisfortheevaluation

of these technologies in the Swiss context

andtheirpotentialroleontheSwissenergy

market.ThisWhitePaperconcernsP2Xre-

lated to electro-chemical conversion and

doesnotaddresselectro-thermalconvertion

systemssuchaselectricheatingandwarm

water systems. With the aim to derive a

technical,economicandenvironmentalas-

sessment of P2X technologies with their

systemic interdependencies, the gas and

electricitymarketsaswellas themobility

sectorarespecificallyinvestigatedincluding

thecorrespondingregulatoryandinnovation

policyaspects(Figure1.1).Complementary

tothisWhitePaper,acomprehensiveback-

groundreportwithdetailedinformationon

thevarioustechnologicalaspectsofP2Xas

wellasthecorrespondingimplicationsfor

markets,legalaspectsandpoliciesisavaila-

ble (for instance, under http://www.sc-

cer-hae.ch/). The background report also

containsreferencestoallliteraturesources

used,whereasthisWhitePaperis limited

toafewselectedliteraturesources.

1 Preface and introduction

Figure 1.1: Schematic representation of the scope of this White Paper.

Environmental Perspective- Life Cycle Analysis- Compare P2X with conventional technology

Techno-Economic Perspective- P2X pathways- Key components and processes- Costs and technical performance

Regulatory & Policy Perspective- Law affecting all P2X systems- Law affecting P2X in the markets

• Electricity • Transport• Heating

- Innovation policy

Power System Perspective- Present and future situation- Grid stability- Ancillary services- Requirements for sizing and siting of P2X in electrical grids

- Techno-economic analysis with focus on market integration

CO2 Sources and Markets- Biogenic - Industrial- Direct Air capture

End-use Market Analysis - Gaseous fuels CH4, H2

- Transport sector - Industry sector H2, CH4

as feedstock- Combined revenues


2.1 Basic principle

ThebasicprincipleofP2Xsystemsentailsin

afirststeptheelectrolysisofwater:using

electricityasprocessinput,waterissplitinto

hydrogen and oxygen. Depending on the

end-useapplication,hydrogencanbeused

directlyor itcanbeusedtoproduceother

energycarriers.Thesynthesisofotherenergy

carriersrequiresfurtherprocesssteps,which

producegaseousorliquidhydrocarbonssuch

asmethane,methanolotherliquidfuels,or

ammonia(Table2.1).Incaseofproduction

of hydrocarbons, this second step needs a

sourceofcarbon,whichcanbeasyngasfrom

biogenicfeedstock,CO2extractedfromthe

atmosphere,orCO2capturedatstationary

emissionsources,e.g.fossilpowerorcement

plants. In a third and last step, the final

productsmayneedtobeupgradedandcon-

ditionedforfurtherusage.

1. Firststep:Electrolysisofwater:

2H2O"2H2+O2

2. Secondstep(optionally,dependingon

targetproduct;oneofthefollowing

processes):

• MethanationofCO2andhydrogen:

CO2+4H21CH4+2H2Oor

MethanisationofCOandhydrogen:

CO+3H21CH4+H2O

• Methanolsynthesis:

CO2+3H21CH3OH+H2O

• Synthesisofliquidfuels,

Fischer-Tropschprocess:

CO2+H2"CO+H2O;

CO+H2"CxHyOH+H2O

• Ammoniasynthesis:

N2+3H212NH3

3. Productupgrading/conversion

andconditioningforfurtherusage

(dependingonthepathway):

• Separation/cleaningandfurther

processingofgaseousandliquid

products

• Compression

• Pre-cooling

2.2 Electrolysis

EachP2Xconversionpathwayischaracter-

izedbyaspecificcombinationoftechnolo-

gies which depends on the required

inputsandtheoutputs(Figure2.1);electro-

lysersareacorecomponentofallP2Xsys-

tems.Therearethreemaintypesofelectro-

lysers:

1. alkalineelectrolysers

2. polymer electrolyte membrane (PEM)

electrolysers

3. solidoxideelectrolysiscells(SOEC)

electrolysers

Whilealkalineelectrolysisistheincumbent

water electrolysis technology and widely

usedforlarge-scaleindustrialapplications,

PEM electrolysers are typically built for

small-scaleapplications,buthaveacompa-

rably higher power density and cell effi-

ciencyattheexpenseofhighercosts.SOEC,

whichoperateathightemperaturelevels,

areonanearlydevelopmentstagewiththe

potentialadvantagesofhighelectricaleffi-

ciency,lowmaterialcostandtheoptionto

operateinreversemodeasafuelcellorin

co-electrolysismodeproducingsyngasfrom

watersteamandCO2.Eventhoughelectrol-

ysisisanendothermicreaction,usuallyheat

transmissionlossesoccurresultinginwaste

heat that might be used in other applica-

2 What is Power-to-X? The “X” in P2X represents products such as hydrogen, methane or methanol.

Table 2.1: Technology over-view of P2X systems including main technologies and their major in-/outputs.

P2X pathway Conversion step

Carbon atoms

Inputs Technology Outputs

Hydrogen (H2) 1(+3) 0 Electricity, water, heat (in case of SOEC)

Electrolyser, hydrogen storage

Hydrogen, oxygen, heat

Synthetic methane (CH4) 1+2+3 1 Electricity, water, CO2 Electrolyser, methanation reactor

Methane, oxygen, heat

Synthetic methanol (CH3OH)

1+2+3 1 Electricity, water, CO2 Electrolyser, methanol synthesis reactor

Methanol, oxygen, heat

Synthetic liquids (CxHyOH)

1+2+3 variable Electricity, water, (heat), CO2

Electrolyser, Fischer-Tropsch reactor

Liquid hydrocarbon fuels, oxygen, heat

Ammonia(NH3)

1+2+3 0 Electricity, water, nitrogen (N2)

Electrolyser, Ammonia synthesis reactor

Ammonia, oxygen, heat


tions.Theprocessefficiencies,i.e.theenergy

contentofthehydrogenbasedontheupper

calorificvalue(HHV)inrelationtotheef-

fective energy input, of advanced future

systemsareinarangeof62–81%foralka-

lineandupto89%forPEMelectrolysersand

evenhigherforSOECelectrolysers.Beyond

the three main types of electrolysis there

areotherelectrolysisprocessesbeinginves-

tigated,suchasplasmaelectrolysis,which

isalsoinanearlyresearchstage.

2.3 Synthesis of methane, other hydrocarbons or ammonia

Fortheproductionofsyntheticgaseousor

liquidhydrocarbonsinsubsequentprocess

stepsafterelectrolysis,differentadditional

reactor systems are required, such as a

methanation reactor (catalytic reactor or

biological reactor), the catalytic Fis-

cher-Tropschreactor,orthemethanolsyn-

thesis reactor, which can also be used in

combinationwithafurtherprocesstopro-

duce oxymethylene ether (OME). In these

reactors,CO2isafeedstockinputinaddition

to hydrogen. The CO2 can originate from

varioussources:CO2canbecapturedfrom

biogenicorsyntheticgasstreams,fromflue

gas from combustion of fossil or biogenic

fuels,orfromtheatmosphere.Throughout

thecompleteP2Xchains,eachprocessstep

is associated with energy losses: typical

efficienciesfortheproductionofelectrici-

Electrolysis is the key process common to all P2X systems.

Figure 2.1: System scheme of different P2X production chains with technology alternatives.(based on [1]).


ty-based synthetic fuels range are in the

orderof20%(OME)toabout40%(methane)

[2].Dependingonthethermodynamicsof

theprocesses,improvedefficienciescanbe

achievedifwasteheat(e.g.fromthemeth-

anationreactor)isusedforheatingpurposes

ofotherprocesseswithintheP2Xsystem.

Also the efficient integration of carbon

sourcesleadstoefficiencygains,asdemon-

stratedbydirectmethanationofbiogasin

a P2X plant with an overall efficiency of

almost60%[3].

2.4 Stage of development

The various technologies involved in P2X

systemsarecurrentlyatdifferenttechnol-

ogy readiness levels ranging from level 5

(“technologyvalidatedinrelevantenviron-

ment”)uptolevel9(“completedandqual-

ified systems”), which is second highest

leveljustbefore“proveofthesysteminan

operationalenvironment”.Electrolysertech-

nologies,whicharecommontoanyroute,

are already mature, in particular alkaline

technology.Methanationreactorshavealso

progressedrecentlytothecommerciallevel

following some successful demonstration

projects,e.g.,a6.3MWelPower-to-Methane

plant in Werlte (Germany) using catalytic

technologyformethanation[4]andthe1

MWel plant from the BiOCAT project in

Copenhagen[5].Fischer-Tropschandmeth-

anolreactorshavealreadybeenwidelyap-

plied in the chemical industry in much

larger scale, but their implementation in

P2Xsystemsisstillindevelopment.

2.5 Infrastructure

Inadditiontotheenergyconversionequip-

ment,infrastructureisneededtobringP2X

productstoend-users.Storagesystemsal-

lowingfortemporalflexibilityofproduction

andconsumptionofP2Xproductsneedto

bepartofthis infrastructure.Forsomeof

the P2X products existing distribution in-

frastructure systems can be used, e.g. the

natural gas grid or the infrastructure for

liquidfuels.ThecurrentbottleneckinSwit-

zerland is the missing infrastructure for

hydrogendistributionandsupply.However,

itisalsopossibletotransportsmallquanti-

tiesofhydrogeninthenaturalgasnetwork.

However,long-distancetransportandstor-

age of hydrogen has been proven, mainly

relatedtoindustrialapplication,suchasthe

Rhine-Ruhr-pipeline in Germany with a

lengthof240km.

P2X can generate clean fuels substituting petrol, diesel and natural gas.


Kyot

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unda

ry

industry

services&

business

households energyconversion

other

cars

delivery vanstrucksbuses

motorbikesother

internat.air transport

nationaltransport

Swiss CO2 emissions(2015)

file:///Volumes/vw452/White Paper P2X/grafiken_EN/f4-1_CO2...

1 von 1 25.03.19, 15:33

3.1 Greenhouse gas emissions and climate change

Mitigatingclimatechangerequiresasub-

stantialreductionofgreenhousegas(GHG)

emissionsacrossallsectorsoftheeconomy.

Thiswillhavesignificant implicationsfor

theenergylandscapeaswellasotheremis-

sionssources.Switzerlandhascommitted

toreducing itsannualdirectemissionsof

GHGby50%by2030comparedto1990.A

major share of this reduction shall be

achieved domestically while some emis-

sions can be based on measures abroad

throughtheuseofinternationalcredits[6].

TheSwissgovernmenthasalsoformulated

thelong-termambitiontoreduceGHGemis-

sionsin2050by70–85%comparedto1990

levels(includingmeasuresabroad),andto

achieve climate neutrality after 2050 [7].

Today,domesticGHGemissionsinSwitzer-

landoriginatebyabout60%fromenergy

conversion in the transport and building

sectors,andby40%fromothersourcesin-

cludingindustry.Currently,mobilityisthe

sectorwithlargestCO2emissions(Figure1).

SwisselectricityproductionisalmostCO2-

free–electricityismainlygeneratedfrom

hydropower(60%),nuclear(32%)andnew

renewableenergy(6%)[8].Futurepathways

for the development of the Swiss energy

sector are framed by the Energy Strategy

2050,whichaimsatdiscontinuingenergy

supplyfromnuclearpowerplantsinSwit-

zerland,andpromotingrenewableenergy

andenergyefficiency[5].

3.2 Increasing renewable power generation

The transformation of the Swiss energy

systemtowardsclimateneutralitycallsfor

thedeploymentofnewlow-carbonenergy

solutions.Atthesametime,thecurrenthigh

levelofreliabilitymustbemaintained.One

option to reduce GHG emissions is an in-

creased electrification of energy services

basedonlow-carbonelectricitygeneration

technologies.Withgrowingsharesofinter-

mittentrenewablesintheelectricitymix,

such as wind and solar power, the chal-

lengesoftemporalandspatialbalancingof

supplyanddemandisexpectedtoincrease

infuture.Temporalbalancingarisesdueto

theinevitablemismatchbetweenrenewa-

bleelectricityproductionanddemandasa

consequenceofday/nightcycles,weather

effectsandseasonaldifferences,whilespa-

tialbalancingisresultingfromdifferences

betweenthelocationsofelectricityproduc-

tionandconsumption.

3.3 Need for flexibility options

AfutureSwissenergysupplysubstantially

relyingonlargesharesofintermittentelec-

tricitygenerationwillneedsufficientflex-

ibilityoptions.Thesemustallowforshifting

energy between day and night as well as

fromsummertowinter:roof-topPVinstal-

lations,whichexhibitthelargestpotential

fornewrenewableelectricitygenerationin

3 Why Power-to-X in Switzerland? Rational behind P2X: The transformation of the energy system in response to future energy and climate challenges.

Figure 3.1: CO2 emissions in Switzerland in 2015 split into different sectors and the Kyoto system boundary [9].


Switzerlandbyfar,showdistinctseasonal

peaksinsummeranddailypeaksatnoon.

In the case of simultaneously low power

consumption,suchgenerationpeakspose

a challenge for the power grid, and these

peaks–ifnottobecurtailed–musteither

bestoredandre-usedaselectricityattimes

without sufficient generation, or trans-

formed intootherenergycarrierssuchas

gasesandliquids,whichcanbeusedase.g.

transportorheatingfuels.Inadditiontothe

flexiblepowerplantsoperatedinSwitzer-

land already today, i. e. reservoir hydro

plants and pumped storage hydro plants,

increasing flexibility by installing further

flexiblepowerplants,storagesandinterna-

tionalelectricitytradebecomesinevitable

atveryhighsharesofwindandsolarPVin

order to operate the electricity system

cost-efficientlyandtoensurethesystem’s

secureoperation[10]–[12].P2Xtechnologies

representoneoptiontoincreaseflexibility.

P2Xtechnologiesnotonlyofferthepossi-

bilityofenhancedsectorcouplingbetween

thepowersectorandenergydemandsec-

tors,butalsotoprovideshortandlong-term

supplyanddemandbalancing.

Power genertion from intermittent renewable sources calls for more.


4.1 Three core benefits of P2X

P2Xsystemscanbedesignedtoincreasethe

flexibilityoftheenergysystemandtomit-

igateGHGemissionsatthesametime.The

followingthreemainpurposescanbeiden-

tified:

1. Energysupply and demand balancing

overalongtimehorizon(e.g.seasonal)

throughstorageofhydrogenorsynthe-

sisproductsandpossiblere-electrifica-

tionofthoseproducts

2. Short-termbalancingflexibilityinthe

power system through load manage-

ment enabled by smartly controlled

electricityconsumptionofelectrolysers

3. Supplyoflow-emissionsyntheticenergy

sourcesbasedonelectricityusingCO2

from the atmosphere, stationary

sources, biogas plants and industrial

processesasasubstituteforfossilfuels

andcombustiblesaswellasarawma-

terialforindustrialprocesses.

Flexibility to the power system can be

provided by electrolysers, if operated in a

system-supportiveway-inparticular,when

abundantrenewableelectricityisavailable

and production exceeds demand (“excess

electricity”).Hydrogenproducedbyelectro-

lysersorenergycarriersproducedinsubse-

quentstepscanbestoredoverdifferenttime

scales,whichisofvalueforseasonalbalanc-

ingofenergysupplyanddemand.Thiscan

helptocoverdemandduringtimeswhen

electricitysupplyislimited(e.g.,inwinter,

when PV generation is low). Low-carbon

fuelsfromP2Xcansubstitutefossilfuelsin

multipledemandsectorsandtherebyreduce

GHG emissions. Hydrogen, methane and

liquidsyntheticfuelscanbeusedforvarious

purposes:asfuelsinengines,fuelcellsand

turbines,forheatandelectricityproduction,

aswellastransportfuels,butalsoasfeed-

stockinchemicalandindustrialprocesses.

Some of these P2X products, such as syn-

theticmethane,canbedirectsubstitutesfor

fossil energy carriers used today, because

they do not require changes in end-use

technologiesattheconsumerside.Metha-

nolaswellasother liquidsynthetic fuels

canbeupgradedtopetrol,dieselandkero-

sene.However,directuseofhydrogenwould

notonlyrequireanewdistributioninfra-

structure or further development of the

existinggasgrid,butalsonewend-usetech-

nologies,suchasfuelcellsthatenablemore

efficientuseofenergythanmanycurrent

technologies.

4 Flexibility as an important element in climate change mitigation

P2X can provide temporal and geographical flexibility in the energy system while enhancing the portfolio of clean fuels.

Figure 4.1: Combination of different hydrogen pathways attributable to P2X technology as part of one possible cost-optimal configuration of the Swiss energy system in 2050 under stringent climate mitigation policy [13]. The diagram shows the electricity used for electrolysis and the quantities of energy produced in P2X technology in the form of hydro-gen and synthetic methane, as well as the use and distribution of P2X products. “H2 direct use” refers to consumption of hydrogen in end-use sectors without being transported through the natural gas grid.

Electricity:4.8 TWh

Electrolyser losses: 1.2 TWh

H2: 3.6 TWh

H2 to gas grid: 0.3 TWh

H2 seasonally shifted: 0.5 TWh

H2 direct use:3.1 TWh

H2 used in stationaryapplications: 1.4 TWh

H2 used in transporttechnologies: 2.0 TWh

H2 used formethanation: 0.2 TWh

H2 storage losses


4.2 P2X as an important element in future energy scenarios

TowhichextentP2Xproductsandthecor-

respondingtechnologiescanprovidethese

multiplebenefitstotheenergysystemina

cost-efficientandclimatefriendlywayde-

pendsonvariouskeyfactors,includingthe

overallsystemefficiency,andtheenviron-

mental and economic performance com-

pared to alternative energy technologies

and to other climate change mitigation

options. Depending on the market condi-

tions,P2Xtechnologiescancontributetoa

cost-optimalenergysupplyinSwitzerland

inthelong-run.

Figure4.1illustratesbenefitsofP2Xandone

possibleconfigurationofP2XintheSwiss

energysystemsubjecttoscenario-specific

assumptionsonfuturedevelopments.

Servingdemandsectors (inparticular the

mobilitysector)withlow-carbonfuelsbased

on electricity complements several other

climate change mitigation measures and

technologies in order to meet ambitious

climategoals.Model-basedcalculationsin-

dicate an electricity consumption by P2X

technologies in 2050 equivalent to about

onethirdoftheelectricitygeneratedfrom

windandPVinthisyear.Withabouthalf

oftheconsumptionduringthethreesum-

mermonths,P2Xtechnologiesabsorbexcess

electricity and convert it into clean fuels,

which are partially seasonally stored to

relievethepressureontheelectricitysystem

inwinter.

Compared to other new renewable energy sources, particular high potential for electricity from solar PV in Switzerland making P2X a key element in a sustainable energy system.


5.1 Levelized costs of P2X products today

The current levelized costs of producing

hydrogenandsyntheticfuelsbasedonlit-

eraturedata(detailsprovidedinthesupple-

mentaryreport)asusedinthisstudyshow

substantialvariationsforthedifferentP2X

conversionpathways(Figure5.1):

• 100–180 CHF/MWhth for hydrogen pro-

duction (HHV based) (Power-to-Hydro-

gen:P2H)

• 170–250 CHF/MWhth for methane pro-

duction(Power-to-Methane:P2M)

• 210–390CHF/MWhthforsyntheticliquid

fuelproduction(Power-to-Liquids:P2L)

• 370–500CHF/MWhel forelectricitypro-

duction(Power-to-Power:P2P)

Thespreadincostsisrelatedtoanumber

of factors, including uncertainties on the

system designs as well as plant size and

equipmentneeds,whichisattributableto

different levels of technology readiness.

Also, costs provided in this white paper

differasaresultoftheassumptionsmade

in the various underlying studies. Main

determinantsforthevariationsarethefol-

lowingcostfactors:

• electricityprice(forelectrolysis),

• operationprofileoftheelectrolysis,

• typeofelectrolyser,

• systemefficiency.

Assuch,thebandwidthsofproduction

costs illustrate the cost implications of a

range of specific system parameters and

market conditions of P2X technology and

underpinsitsmanifoldtechnologydesign

and market configurations. As a conse-

quenceofsite-specificcharacteristics(e.g.

low-carbon electricity supply, CO2 source,

hydrogendemand,gasgridcapacity)equip-

ment needs and scale effects impact the

investmentneedsassociatedtoP2X.Litera-

tureindicatesscaleeffectsofareductionof

thespecificinvestmentcostsbyhalfwhen

scalingupfromkWtoMWsizelevels[14],

which is typical for large-scale industrial

applications in the chemical and energy

sector.

5 Costs of Power-to-X

Figure 5.1: Distribution of the levelized cost for the various P2X routes based on current cost and performance data (representative for the year 2015; data sources are provided in the supplementary report). The boxplots include the median (middle quartile inside the box), 25th and 75th percentiles. The whiskers extend to the most extreme data points not considering outliers, and the outliers are plotted individually using the ‘•’ symbol. For routes producing gas, data are based on the HHV; for the P2L route, the unit “CHF per liter gasoline eq.” represents an energy-related cost matrix with limited comparability to retail fuel prices, which entail a significant tax component.

Today, P2X is expensive but research and innovation is expected to reduce costs in future.

17.8 17.8CHF/kgH2CHF/MWht

CHF/kgCH4

0 0 0

0.9

1.7

2.6

3.4

4.3

5.1

17.8

6.8

CHF per liter gasoline-eq.

P2H P2M P2P P2L

3.9

7.9

11.8

15.8

19.7

23.6

31.5

1.5

3.0

4.6

6.1

7.6

9.1

12.2

CHF/MWhth

CHF/MWhth

CHF/MWhel

CHF/MWhth


5.2 Power-to-Hydrogen

Withtheelectrolyserbeingthecorecom-

ponentofP2Xsystems,hydrogenproduc-

tioncostssubstantiallydependontheex-

penditures for electricity.For currentP2H

technology,theaverageacrossthestudies

depicts hydrogen production costs of

144 CHF/MWhth.Dependingoncostsofelec-

tricitysupply,theshareofelectricityintotal

hydrogen production cost for electrolysis

canbe50%andhigher.Whencomparing

thehydrogenproductioncostsforelectrol-

ysiswithalternativeproductionprocesses,

itbecomesevidentthatproducinghydrogen

withP2Hsystemsiscurrentlymoreexpen-

sivethanproductionbasedonthewidely

appliednaturalgassteamreformingprocess

(around60CHF/MWhthofhydrogenatagas

price levelof40CHF/MWh).Severalcom-

parativestudieshighlightthisdifferencein

productioncostswithafactoroftwotofive

[15][16].Electricity-basedhydrogenproduc-

tion could become competitive, if natural

gassupplycostssubstantiallyincrease,e.g.

asconsequenceofincreasingworldmarket

pricesfornaturalgasand/orenvironmental

legislation,andifelectricitysupplycostsfor

electrolysisarelow[17].Asitcanbeseenin

Figure 5.2, which depicts the generation

costs forhydrogenas functionof the fuel

inputcostsintherightpanel,verylowhy-

drogenproductioncostsforelectrolysiscan

onlybeachievedatlowelectricitycosts.If

electricityisavailableatzerooratverylow

Figure 5.2: Hydrogen production costs for different electrolyser configurations (regarding investment costs, efficiency) as function of the annual electrolyser capacity utilization (left panel) and as function of the costs for electricity supply (right panel). For comparison the right panel includes hydrogen production costs for steam methane reforming, which are depicted relative the costs for natural gas supply. For all hydrogen production technologies maximum 90000 total operation hours or 20 years lifetime and a discount rate of 5% is assumed.

Key for cheap hydrogen: low-cost electricty and a few thousand hours of annual production.

0

50

100

150

200

250

0 20 40 60 80 100 120

Hydr

ogen

pro

duct

ion

cost

s (C

HF/M

Wh)

Electricity supply costs (CHF/MWh)Natural gas supply costs (CHF/MWh)

Electrolyser: 920 CHF/kWe and 62% efficiency,4500 full load hoursElectrolyser: 460 CHF/kWe and 62% efficiency,4500 full load hoursElectrolyser: 920 CHF/kWe and 81% efficiency,4500 full load hoursElectrolyser: 460 CHF/kWe and 81% efficiency,4500 full load hoursSteam methane reformer: 250 CHF/kWe and76% efficiency, 4500 full load hours

0

50

100

150

200

250

300

350

0 0.2 0.4 0.6 0.8 1

Hydr

ogen

pro

duct

ion

cost

s (CH

F/M

Wh)

Annual utilisation (8760h = 1)

Electrolyser: 920 CHF/kWe and 81% efficiency,electricity price 100 CHF/MWhElectrolyser: 920 CHF/kWe and 62% efficiency,electricity price 100 CHF/MWhElectrolyser: 460 CHF/kWe and 81% efficiency,electricity price 20 CHF/MWhElectrolyser: 460 CHF/kWe and 62% efficiency,electricity price 20 CHF/MWhElectrolyser: 920 CHF/kWe and 81% efficiency,electricity price 20 CHF/MWhElectrolyser: 920 CHF/kWe and 62% efficiency,electricity price 20 CHF/MWh

at 4500 full load hours


price(e.g.attimesoflowdemandandhigh

generation), hydrogen production costs

wouldbemainlydeterminedbythecosts

forequipmentandoperationandmainte-

nance(O&M).Accordingtotheliterature,

lowcapitalcostsforalkalineelectrolysers

of460CHF/kWel(greenlinesinFigure5.2)

might be achieved in 2030, which would

translateintoaproductioncostlevelofless

than40CHFperMWhthofhydrogengiven

highefficiencyandverylowelectricityprice

levels(<20CHF/MWh).Underlessoptimis-

ticassumptionsforthecapitalcostsofthe

electrolyser (920CHF/kWel foranalkaline

electrolyserin2030),hydrogenproduction

costsareabove40CHF/MWhthatanelec-

tricity price of 20 CHF/MWhel and could

increasetoalevelofmorethan150CHF/

MWhthathighelectricityprices(blacklines).

Comparedtoalkalineelectrolysers,today’s

specificinvestmentcostsofPEMelectrolys-

ersareroughlytwiceashigh;however,re-

searchanddevelopmentandscaleeffects

inproductionmightbringdowncostsclose

tothoseofalkalinetechnology.Underopti-

misticassumptionsregardingthedevelop-

mentofinvestmentscostsandcomparably

higherefficiencies,PEMelectrolysersmight

be able to produce hydrogen at slightly

lower costs than alkaline electrolysers in

future.Inaddition,PEMelectrolysersprom-

iseimprovedoperatingbehaviouratpartial

andoverloadloadsaswellasreducedspace

requirementscomparedwithalkalineelec-

trolysers.

Withincreasingelectricitysupplycosts,the

efficiencyoftheelectrolyserbecomesmore

important for the system’s profitability.

However,potentialefficiencyincreasesare

limitedandmaynotbeabletofullycom-

pensatehighelectricityprices.Theannual

utilizationoftheelectrolyserhasasmaller

impactontheproductioncosts,aslongas

operatedathigherutilizationrates.Inthe

casespresentedintheleftpanelofFigure

5.2, hardly any significant cost impact re-

sultingfromchangesintheannualcapacity

utilization of the plant can be observed

above4500fullloadhoursperyear(annual

utilizationfactoraround0.5ingraph).This

impliesthattherearenotnecessarilyneg-

ativehydrogenproductioncostimplications

ifP2Xplantsarenotoperatedduringsea-

sonswhenelectricitydemandishighand

renewableresourceavailabilitycomparably

low,asitisthecaseduringthewintertime.

Verylowutilizationrates,however,havea

significant impact on the amortization of

theinvestmentsandhenceonthecostsof

hydrogenproduction.Forelectrolysersop-

eratingabout900fullloadhoursperyear,

whichisroughlyequivalenttotheannual

fullloadhoursofPVincentralEurope,only

the capital-related hydrogen production

costsareinarangeof50–100CHF/MWhth

(forinvestmentcostsof460–920CHF/kWel

andadiscountrateof5%and20yearslife-

time). From this, it can be deduced for a

cost-effectiveproductionofhydrogenthat

eitherasignificantreductionintheinvest-

mentcostsoftheelectrolyserisrequiredif

electricitycanonlybeobtainedatlowcost

forafewhoursperyear,orthatP2Xsystem

operatorscanensurecost-effectiveelectric-

ityoveralongerperiodoftime–i.e.alsouse

sources of electricity that go beyond the

exclusive use of surplus electricity from

solarPV.

5.3 Power-to-Methane

Syntheticmethaneproductionrequires

additional process steps after electrolysis

resulting in additional costs: investment

costs for the methanation reactor, costs

associated with an additional efficiency

dropandcostsforCO2supply.Theseaddi-

tional costs increase the current average

levelizedproductioncostbyabout70CHF/

MWhthto170–250CHF/MWhthfortheP2M

pathway.Whilefutureexpectedtechnology

learning rates for methanation reactors

seemtobelowerthanforelectrolysers,unit

sizesandup-scalingseemtohaveasubstan-

tial impact on costs. Depending on unit

sizes,specificinvestmentcostsforcurrent

methanation reactors are in a range of

1150–460CHF/kWthforsizesof1–10MWth

(catalyticmethanation),respectively.These

capitalcoststranslateintoadditionalmeth-

aneproductioncostsontopofthehydrogen

costsofabout20–40CHF/MWh.Literature

suggeststhatfutureinvestmentcostscould

halve by 2030 resulting from technology

improvementsandscale-upeffects.Another

costcomponentformethaneproductionare

thecostsassociatedwithsupplyofCO2.The

specificenergyandcostsperunitcaptured

CO2typicallydecreasewithincreasingCO2

concentration. Very low costs can be

achieved, if energetic synergies of biogas

upgrading plants and P2M plants can be

used,forinstancewhenheatasby-product

canbeusedefficientlyintheP2Msystem.

Thehighestcostreportedintheliterature

usedinthisstudyrefertodirectCO2capture

fromtheair(250CHFpertonofCO2[18]),

whichresultsinadditionalcostsof50CHF/

MWhth. However, since direct air capture

technologyisinanearlycommercialdevel-

opment stage, there exist substantial un-

certaintiesrelatedtothecostsfordirectair

capturetechnology–capturecostsof600

CHFpertonofCO2[19]couldimplysubstan-

tiallyhigheradditionalcostsformethane

production of up to 120 CHF/MWhth. It is

Costs to provide CO2 as input to methanation represent show high variability and depend on the carbon source.

Low-cost synthetic methane requires large methanation plants.


expected that the costs of capture from

other CO2 sources, such as fossils power

plantsandcementplants,arelowersince

the CO2 concentration of these flue gas

streamsishigherthantheCO2concentra-

tionintheatmosphere[20].

5.4 Power-to-X-to-Power

When hydrogen or methane generated in

P2HandP2Msystemsareconvertedback

intoelectricity(P2P),levelizedcostsofen-

ergyconversionincreasesubstantially.The

costs of the P2P pathway depend on the

conversion processes used to produce the

syntheticgas(i.e.P2HorP2M),thetypeof

re-electrification (e.g., fuel cell or gas tur-

bine) and the hydrogen or SNG storage

equipment,ifneeded.Herewefocusonboth

P2Proutesprovidingmid-term(onanhourly

level)andseasonalstorage.Currently,elec-

tricity can be produced in a gas turbine

combined cycle plant with methane pro-

ducedviaP2Mattotallevelizedgeneration

costsofabout300CHF/MWhel;generation

costsincreaseto470CHF/MWhelforasys-

temof1MWelusingP2H,hydrogenstorage

and a commercial-scale fuel cell. In this

calculation,however,norevenuesfromthe

inherentco-productionofheatareconsid-

ered. If heat is used (e. g. for heating of

buildings or in industrial processes) and

revenues(orcredits)canbeaccountedfor,

lowerP2Pcostscanbecalculated.

Onlylimitedlearningcanbeexpectedinthe

future for the re-electrification via tradi-

tionalgas-basedtechnologies(gasturbine

orinternalcombustionengine).Thisimplies

that cost declines for the P2P route relate

rathertothecostdevelopmentsofelectro-

lysersandmethanationunits.Forfuelcell

systems,futuretechnologyoutlooksreveal

hightechnologylearningrateswithreduc-

tionsinspecificinvestmentcostsbyafactor

of2–6until2030.Combiningthehighfuel

celltechnologylearningwiththepossible

technologydevelopmentsforelectrolysers,

totalcostsofhydrogenbasedP2Pelectricity

generationcouldbereducedbytwothirds

until2030resultingin150CHF/MWhel.

5.5 Power-to-Liquids

Currentcostsrelatedtosyntheticliquidfuel

productioninP2Lplantsshowthehighest

rangewith210–390CHF/MWhth.Similarto

themethanationprocess,thecostsforthe

productionofsyntheticliquidfuelssubstan-

tially depend on the plant size. Ethanol

plantscanbebuiltuptoscalesofmultiple

hundredmegawatts,aspracticedinAsian

andtheUS.Thisleadstosubstantialcosts

reductionscomparedtosmall-scaleplants.

However, it also requires a corresponding

infrastructuretosupplyandprocessinputs

andoutputs.Thespecificinvestmentcosts

ofamethanolsynthesisreactorrangesfrom

120–310 CHF/kWth; Fischer-Tropsch reac-

torscostabout80–300CHF/kWth.Already

today, these reactor technologies are well

establishedonglobalmarketswhichmakes

costreductionsinthefutureunlikely.There-

fore,futurecostdeclinesforP2Ltechnolo-

gies will mainly be attributable to reduc-

tionsofelectrolysercostsandscale-effects

whenincreasingplantsizesandproduction

volumes.

Re-electrification of hydrogen leading to very high electricity supply costs.


6.1 Life Cycle Assessment (LCA) considerations

Withelectricityasmajorinput,impactsof

P2Xprocessesonclimatechange–i.e.their

GHG emissions – mainly depend on the

carbonintensityoftheelectricityusedfor

electrolysis[21]:LCAresultsshowthatusing

renewableelectricitysuchaswindpower

or photovoltaics results in substantially

lower life-cycle GHG emissions than con-

ventional hydrogen production via steam

methanereformingofnaturalgas,thema-

jorproductionroutetoday.Alsousingcur-

rentaverageSwisselectricityfromthegrid

(including imports) is advantageous in

termsofGHGemissions.Comparedtosteam

methane reforming of natural gas, the

thresholdfortheGHG-intensityofelectric-

ity used for electrolysis is around 210 g

CO2eq/kWh, which is roughly 50% lower

thanthelife-cycleGHGemissionsofanat-

uralgascombinedcyclepowerplantorthe

currentelectricitymixinEurope.

For generation of synthetic gaseous fuels

from H2 and CO2, the carbon intensity of

electricityusedforelectrolysis,thecarbon

source as such and the carbon emissions

associatedwithheatandelectricitysupply

forCO2capturearethedecisivefactorsre-

gardingoverallGHGemissions.Onlyelec-

tricity with a carbon intensity as low as

hydroorwindpowerallowsforasubstantial

reductionoflifecycleGHGemissionscom-

pared to the use of natural gas (or other

fossilfuels)asvehiclefuel.Duetotheenergy

lossesalongP2Xchains,directuseofelec-

tricityinBEVisthepreferredoptioninterms

oflife-cycleGHGemissions,assoonaselec-

tricitysupplyisassociatedwithhigherGHG

emissions than electricity from hydro or

windpowerplants(Figure6.1).Amongthe

P2Xfuels,thedirectuseofhydrogenleads

to lower climate impacts than the use of

synthetichydrocarbons. Incaseofhydro-

carbons,theoriginofCO2isadecisivefactor:

WhileusingsyntheticfuelswithCO2cap-

turedfromthecombustionoffossilfuelsor

theuseofmineralsourcesalwaysrepresents

an addition of CO2 to the natural carbon

cycle,capturingCO2fromtheatmosphere

orbiogenicsourcesinprincipleallowsfor

thesynthesisofcarbonneutralenergycar-

riers [22]. In general, process integration

withuseof“wasteheat”fromconversion

processesimprovestheenvironmentalfoot-

printofP2X.

6.2 CO2 sources

For the production of synthetic methane

andliquidsyntheticfuels,acarbonsource

isrequiredwhichcanbebasedonbiogenic,

mineralorfossilfeedstock;alsotheatmos-

phere can act as CO2 source. Such CO2

sources need to be available in sufficient

6 Climate change mitigation related benefits

Climate benefits to be achieved only with low-carbon electricity.

Figure 6.1: Life-cycle GHG emissions per kilometer for different current pas-senger vehicles and fuels as a function of the GHG emission content (“CO2 intensity”) of electricity used for battery charging, hydrogen or SNG generation, respectively [23]. Here, CO2 for SNG production is captured from the atmosphere and represents no additional addition to the carbon cycle when SNG is combusted. ICEV: Internal combustion engine vehicle. CO2 intensities of specific electricity sources in Switzerland for comparison: hydro-power ca. 10 g CO2eq/kWh, wind power 10–30 g CO2eq/kWh, PV 50–100 g CO2eq/kWh, Swiss mix 100–150 g CO2eq/kWh, natural gas combined cycle 400–500 g CO2eq/kWh [24].

0

100

200

300

400

500

600

700

800

0 100 200 300 400 500

Battery electric vehicleFuel cell electric vehicleICEV SNGICEV dieselICEV gasICEV petrol

Gre

enho

use

gas e

mis

sion

s of v

ehic

les

[g C

O2e

q/km

]

CO2 intensity of electricity [g CO2eq/kWh]

2017


quantitiesatcompetitivecosts.Capturing

CO2needsenergyandinfrastructure,unless

biogasisdirectlyusedasfeedstockfordirect

CO2methanation.Ultimately,whenthesyn-

theticgaseousorliquidfuelproducedfrom

CO2andhydrogenisusedforenergycon-

version(e.g.inacarwithcombustionengine

orinaCHP),CO2willbegeneratedagainas

combustionproduct.Assuch,P2Xtechnol-

ogiesareabletoshiftemissionsintime,but

theydonotrepresentanetcarbonremoval

fromthecarboncycle.

One possible source of CO2 is biogas pro-

duced from biogenic substrates (sewage

sludge,greenwastes,agriculturalresidues

andmanure)bymeansofanaerobicdiges-

tion. Depending on the substrate and the

process,theCO2contentofthebiogascan

reachupto45%.IftheCO2iscapturedfrom

thebiogas,methaneremainsamajorprod-

uctwhichcanbefedasbiomethaneintothe

gas grid or directly used on-site. Today’s

existing biogas production in Switzerland

(around150biogasplants[25])represents

aCO2supplypotentialofabout0.14MtCO2

peryear.

Whilethefeedstockpotentialfromsewage

isalreadyusedlargelytoday,anaerobicdi-

gestion of agricultural crop by-products,

greenwastesandespeciallymanurehasthe

potentialtostronglyincreasetheamount

ofavailablebiomethaneandbiogenicCO2.

FurtherpotentialbiogenicCO2sourcesrefer

totheconversionofwoodresiduesthrough

indirectwoodgasificationandmethanation

of the producer gas, followed by CO2 re-

moval. Using one quarter of the unused

woodwithinthecorrespondinggasification

plantwoulddoubletheflowofbiogenicCO2

availablefromexistingbiogasplants.

Other potential sources of CO2 are large

stationarycombustionunitsandindustrial

plants, such as waste incineration plants

(29inSwitzerland)orcementplants(5in

Switzerland);however,locationoftheplants

matters[26].Usingthesesourcesimpliesto

separateCO2fromagasstream,whichcon-

tains nitrogen and unburned oxygen, as

wellassulfuroxides,nitricoxidesandmany

otherimpurities.AtypicalCO2concentra-

tioninthefluegasofthesepointsourcesis

below 20 %. Today’s waste incineration

plantsareresponsibleforroughly60%(4.2

MtCO2)oftheCO2richfluegasesinSwitzer-

land and the five cements plants for 38%

(2.7 MtCO2). All the biomass-based plants

represent minor share. Although, from a

technicalpointofview,thesesourcescould

providesubstantialamountsofCO2, their

vicinity to large-scale production sites of

renewable generated electricity could be

problematic.IftheCO2sourceisclosetothe

P2Xplantandtotheelectricityproduction

source,transportinfrastructure,andhence

costs,canbereduced.

Direct air capture allows to use CO2 con-

tainedintheambientair,i.e.alreadybeing

partofthenaturalcarboncycle.However,

thelowCO2concentrationintheairbelow

0.1 Vol.-% makes direct air capture more

energyintensiveandexpensivecompared

to many other CO2 capture options. With

pilotplantsatseveralsites,directaircapture

technologyisbeingdevelopedandtestedin

Switzerlandtoday.

Location of P2X production matters: direct access to renewable power and sufficient amounts of CO2 are required.


7.1 P2X as service provider

P2Xtechnologiescansupportthepowergrid

intwoways:

1. tobalancesupplyanddemandandto

managetheexcessofelectricitygener-

atedfromnon-dispatchablefluctuating

renewableelectricitysources

2. toprovideancillaryservicestostabilise

thegridfrequency

WhichservicesP2Xisactuallyabletopro-

vide depends on the system design. If no

re-electrification technology is installed,

electrolysers can be operated as flexible

electricityconsumers.Forsuchanoperation,

hydrogenstorageisrequired,sincehydro-

gendemandislessflexible.Equippedwith

ahydrogenstorageandare-electrification

unit,moresystemservicescanbeoffered.

Inparticular,positiveandnegativebalanc-

ingpowersimultaneously.Yetanotheras-

pectcanbeconsidered:ifinstalledatprop-

erlyselectedlocationsinthegrid,P2Xplants

wouldalsohavethepotentialtorelievethe

grid infrastructure from line and trans-

formeroverloadsbyabsorbing locallythe

generated power and eventually also to

control the voltage if it exceeds the given

limits.Inpractice,itwillberatherdifficult

toinstallP2Xplantsexactlyatlocationsof

theSwisselectricitygridwhereneededfor

these purposes. To what extent P2X can

providethesesystemservicesinacost-ef-

ficientwaydependsonthemarketcondi-

tionsandcharacteristicsofalternativetech-

nologies.Thesealternativesincludeflexible

electricitysupplyviaimportsandexports,

flexible power plants, alternative storage

optionsanddemandsidemanagement[27].

7.2 P2X as electricity storage option

In order to balance electricity supply and

demandonashorttimescale(day/night),

pumpstorages,Li-Ionbatteries,andpoten-

tiallycompressedairenergystorages(CAES)

areabletoprovidethisserviceatlowercosts

than P2X systems with re-electrification.

Assuming365storagecyclesperyear,the

levelizedcostofenergystorageofapump

storage is about 50–70% lower than the

costsofP2Psystems(at370–500CHF/MWhe

as shown in Figure 5.1), while the corre-

spondingcostsofbatterysystemsareabout

20–30% lower. Taking into consideration

therapidlydevelopingbatterymarket,this

cost difference of batteries compared to

pumpstoragepowerplantscanbeexpected

tobecome(much)smallerinfuture.When

comparingstoragesystems,importantpa-

rametersarethenumberofcycles,thestor-

age efficiency, the power-to-energy ratio

andthecompositionofthecosts.Compared

toLi-Ionbatterysystems,P2Xsystemshave

higherstoragelossesaswellashighercosts

fortheconversionequipment,whichresults

inacomparablyhighshareofcapitalforthe

energychargingunitaswellashigherop-

eration costs if used for daily balancing

purposes. Conversely, if P2X systems are

usedforseasonalstoragewithonecycleper

year, they are able to convert and store

energyatlowercostscomparedpumpstor-

agesandLi-Ionbatteries.Thisresultsfrom

thelowcostsrelatedtothestoragepartof

P2X systems (e.g. in hydrogen vessels or

underground)incomparisontoahydrodam

orthebatteries.

Technically,P2Xtechnologieswithre-elec-

trificationcanprovideseasonalflexibility

tobalanceelectricitysupplyanddemand.

However, this would require substantial

investmentsanddedicatedmarketmecha-

nisms.P2Xtechnologiesconnectedtolarge

storagesformethaneorhydrogenwiththe

optiontore-electrifytheseenergycarriers

offer a unique option for the electricity

systemaddressinglargevariationsofsea-

sonalproductionandconsumptionpatterns.

Currently,thereisnostorageoptionwithin

Switzerland that is able to absorb large

quantitiesofelectricity(e.g.fromsolarPV)

insummerandtostoretheenergyforpro-

ducing electricity again in winter when

demandusuallyishighandelectricitypro-

ductionfromPVislow.

Alternativelytoshiftingelectricityfromone

seasonintoanotherusingP2P,otherflexi-

bilitymeasurescouldbedeployed.Oneop-

tionistousetheflexibilitytheinternational

tradeofelectricityoffersbyexportingelec-

tricity during the summer and importing

electricity during winter. This scheme is

already practiced in Switzerland today as

theconsequenceoftheseasonalavailability

ofhydropower.Applyingthisschemeinthe

futureimposestheriskthatsimilarproduc-

tionpatternsacrossEuropeleadtothesitu-

ationthatSwitzerlandexportselectricityat

times when market prices are low while

importsarerequiredduringtimesofhigh

electricityprices.However,comparingthe

levelized cost of electricity storage of the

entireP2Ppathway(370–500CHF/MWhel)

withthecurrentexpendituresforelectricity

trade (corresponding to specific average

costsof40CHF/MWhelasaveragein2016),

traderepresentsalessexpensiveoptionto

provideseasonalflexibility.Thisstatement

issupportedbythepricedevelopmentson

thespotmarket,where,forinstance,more

than95%ofthetradevolumeinGermany

was traded at prices below 50 €/MWh in

2016[28].Thecorrespondingdifferencesin

7 Power-to-X and the Swiss electricity market

P2X – a competitive seasonal electricity storage option.


theaveragemonthlyspotmarketpricesdid

notexceed16€/MWh.Thiscomparisonof

electricity prices and P2P storage costs

showsthatelectricitypricespreadsbetween

monthsorseasonswouldneedtobemuch

higherasobservedintherecentpastuntil

P2P becomes a cost-efficient monthly or

seasonal flexibility option. Model-based

long-termanalysesfortheyear2030indi-

cateincreasingpricesforelectricityonEu-

ropean wholesale markets, if natural gas

pricesandpricesforCO2emissionscertifi-

cates increase [29]. However, the market

pricelevelswouldbestillbelowoptimistic

assumptionsfortheelectricityproduction

costsfortheP2Ppathway.Itcanbeexpected

thatrisingelectricitypricespreadsapplica-

ble to the market participants would also

trigger the deployment of further supply

anddemandflexibilityoptions,suchasflex-

iblepowerplants,digitalizeddemandside

responseandenergysavingmeasures.An

exampleforthesupplysidewouldbepower

plantswithcombinedheatandpowerpro-

duction operated during the intermediate

seasonsandthewintertimewhentheheat-

ingdemandishighandelectricityproduc-

tion from solar PV is low. On the demand

side,forinstance,higherpricesduringthe

winter season could trigger investment

shiftsfromheatpumpswithlowerefficien-

ciestoheatpumpsystemswithhighenergy

performance.Longerperiodsoflowprices

duringthesummerwouldprovideincentive

forbroaderdeploymentofelectricity-based

applicationsduringthistimewhichwould

alsoincludeelectricity-basedhydrogenpro-

duction. Model-based scenario analysis

shows multiple flexibility options being

availabletoeaselong-termsupplyandde-

mandvariationsinthefutureSwissenergy

system,ofwhichP2Xsystemswithseasonal

storage and re-electrification represent a

solutionwithcomparablyhighcosts[13].

7.3 Grid stabilization via P2X

Fromatechnicalpointofview,P2Xsystems

cancontributetostabilizethegridandoffer

suchservicesontheancillaryservicesmar-

kets, possibly as part of a virtual power

plant. The existing electric power system

has been built on power plants in which

electricity is generated centralized using

largeconventionalsynchronousgenerators.

Their control loops and inertia resulting

fromtherotatingmassesstabilizethefre-

quencyoftheelectricalpowersystem.With

increased deployment of new renewable

energy,i.e.windandsolarPV,andthephase

outofnuclearpowergeneration,thecon-

ventional power generation is gradually

replacedbyanincreasingamountofrather

smallpowerplantsusingrenewableenergy

sources.Thesepowerplantsaredecentral-

ized and connected to the grid at lower

voltagelevelsthroughpowerelectricdevices

without any mechanical inertia, which

woulddirectlycontributetotheshort-term

stabilityofthepowersystem.Gasturbine

technologiesfueledwithhydrogenormeth-

ane produced in P2X technologies could

providethisbenefitatreducedclimateim-

pactcomparedtotheuseofnaturalgas.On

top of the inherent stability provided by

rotating masses, a three stage ancillary

servicesmechanismreferredtoasprimary,

secondaryandtertiarycontrolreservesex-

istsinordertoensureastableoperationof

the today’s electrical power system. From

thetechnicalpointofview,P2Xsystemscan

participateinallthreemarkets.Beyondthe

proofofsufficientlyflexibleoperation,direct

participationonthecontrolreservemarkets

requirestheabilitytoofferaminimumbid

of1MWor5MW,dependingonthetypeof

controlreserve.Sincetoday’selectrolysers

aretypicallysmaller,thiswouldrequireP2X

technologiestobepartofaclusterofsmaller

plants.Participatinginthemarketthrough

clusteringaveragestheearningsatthelevel

of 60 % of the market price. However,

through pools not only the minimum bid

sizeof5MWcanbeovercome,butalsothe

controlreservecanbeofferedasymmetri-

cally,i.e.onlyintoonedirectionwhenpro-

vidersofferachangeofset-pointofeither

onlytheconsumption(–)orthegeneration

(+) by the committed amount of reserved

power.Moreover,throughapooltheservice

providercanbidonlyforafewdaysorhours

insteadofawholeweek;thus,itsflexibility

ishigherthroughthepool.Basedonthedata

providedbySwissgridfor2017,anoverview

ofallthreestagesoffrequencycontrolfor

Switzerland is provided in Table 7.1. The

total capacity for providing ancillary ser-

viceswassmallcomparedtotheinstalled

generationcapacityoftheentireelectricity

system:aprimarycontrolreserveofabout

±70MW,andasecondaryandtertiaryre-

serveintherangeof±400MW.Thecontrol

reservemarketsarecompetitivewithlarge

hydropowerplantsdominatingthesemar-

ketsinSwitzerland.Since2015,themarkets

arealsoopenforsmallhydropowerplants,

biomass,windandsolarPVpowerplants,

whichleadtoanincreaseinthenumberof

participants.

Amongtheupcomingelectricity-basedstor-

agesystems,andbasedontypicalandex-

pectedtechnologycharacteristics,batteries

seem to be appropriate as balancing sys-

temsonthemarketforprimaryandsecond-

ary control reserves, while P2X is rather

considered as a balancing option in the

P2X units can be pooled to provide electricity system services.


secondarycontrolreservemarket.Battery

storagesystemsarenowenteringthepri-

marycontrolmarket(e.g.,EKZinstallations

inDietikonandVolketswilwithcapacities

ofupto1MWand18MW,respectively)and

newtechnicalapproaches(oftenreferredto

as“virtualpowerplants”)arealreadyavail-

ableonthemarket.Thesenewmarketpar-

ticipantsincreasinglyprovideprimaryand

secondarycontrolreservesthroughcoordi-

natedandaggregatedmanagementofflex-

ibleloads(suchasheatpumps)andsmaller

batteryenergystoragesystemsforhouse-

holds.

EventhoughP2Xsystemsareabletoprovide

electricitygridservices,currenteconomic

conditionsonthesemarketsaloneare in-

sufficienttoprovideincentivesforP2Xtech-

nologyinvestmentandoperation.Theprices

ontheancillaryservicesmarkethaveshown

adecliningtrendoverthepastyears.Con-

versely to the spot market for electricity,

whichfollowsamarketclearingrulewith

one uniform market price for the trading

period,remunerationontheancillaryser-

vices market applies the “pay-as-bid”

schemewhereeachsuccessfulbidisremu-

neratedasofferedonthemarket.In2017,

systemserviceswereremuneratedwithon

average 2470 CHF/MW per week on the

primaryreservemarketand5540CHF/MW

perweekonthesecondaryreservemarket.

Thiscorrespondstopotentialrevenueson

today’s ancillary services markets in the

rangeof10Mio.CHF/yearforprimaryre-

serveand120Mio.CHF/yearforsecondary

reserve. These average weekly revenues

comparetototalweeklycostsofelectrolys-

ersofabout10000CHF/MWhel(withinvest-

mentcostsof920CHF/kWe,a3%shareof

fixedoperatingandmaintenancecostsand

aninterestrateof5%aswellaselectricity

procurementcostsof40CHFperMWh,4500

hours of use per year and an electrolysis

efficiencyof62%)ofwhichthecapital-re-

lated expenditures represent about 1420

CHF/MWel.ForaP2Xplantwithafuelcell

re-electrification unit, the capital-related

expenditures even exceed 20 000 CHF/

MWhelperweek.Thiscomparisonindicates

thatoperationofP2Xtechnologyonancil-

lary services markets can provide some

additionalrevenues,butthesemarketscan-

notcoverthefullcosts.WhetherP2Xtech-

nologies can compete on these markets

depends on other market participants.

Swissgridaimsatenhancingthemarketfor

control reserves and to further promote

“virtual power plants” to participate on

these markets. This is expected to unlock

additionalflexibilitypotentialsavailableon

thesupplyanddemandsides,whichwould

leadtoafurtherincreaseofcompetition.

Thefuturedemandforcontrolreserveca-

pacityisunknown.However,model-based

calculationsindicateanincreasingneedin

future. According to [13] up to 50% more

secondarypositivecontrolreservecompared

totodaywillbeneededin2050duetovery

high shares of solar PV and wind in the

Swisselectricitysystem,whilethepeakof

therequiredpositivereservecapacityshifts

fromwintertosummer.Alargeshareofthe

additional reserve capacity could be pro-

videdbyhydropowerplantscomplemented

by other flexible generation and battery

systems.

Table 7.1: Ancillary services, control reserves in Switzerland 2017 [30] (Swissgrid, “Ausschreibungen Regelleistung 2017”). Providers of secondary and tertiary control reserves are paid also for the provided energy according to the energy market price increased by 20%.

Ancillary ServiceControl reserves

Weekly averagein 2017[CHF/MW]

Sizeof reserve[MW]

Min bid size[MW]

Max bid size[MW]

Estimatedmarket size[Mio CHF/Year]

Primary reserves 2466 ±68 1 25 10

Secondary reserves 5535 ±400 5 50 120

Tertiary reserves (–) 680 –300 5 100 10

Tertiary reserves (+) 450 +450 5 100 10

Provision of system services can generate some additional revenues for plant operators but competition on Swiss market to increase in future.


Integrating P2X technologies into the gas

markethastwomainadvantages:

1. Directsubstitutionoffossilenergycar-

riersusingexistinginfrastructure

2. Access to large scale storages in the

Europeangasnetwork,e.g. theunder-

groundgasstorageintheFrenchJura

TheSwissnaturalgasmarkethostsenergy

consumers responsible for 11.5 % of the

Swiss gross energy consumption in 2016.

Nowadays natural gas is mainly used in

households,theindustryandinservicesfor

heating purposes and thus underlies sea-

sonal fluctuations with the highest con-

sumption during winter. The natural gas

transportinfrastructure,apipelinenetwork,

hasbeenbuilttosupplythemidland,the

east,thewestandcentralSwitzerland.Cur-

rently, Switzerland has access to a total

storagecapacityofabout1600GWh,equiv-

alent to less than one month of average

annualnaturalgasconsumption.5%ofthis

storagecapacityrelatestothenationalgas

gridanditsabilitytoabsorbhigherquanti-

tiesofnaturalgasthroughpressureincrease

orstoredinsmallscalevessels.95%referto

thestoragesiteintheFrancewhichiscur-

rentlydedicatedtoensuresupplysecurity

inSwitzerland.

8.1 Sythetic methane

The gas market might play an important

roleinthetransformationoftheSwissen-

ergysystem:comparedtootherfossilen-

ergy carriers, environmental impacts of

naturalgasarelow;and,naturalgascanbe

graduallyreplacedbybiomethaneandsyn-

thetic methane using the existing infra-

structure.Beyondnewgassupplytechnol-

ogies, the gas market might face other

changesinfuture:demandformethanewill

likely decrease as a result of increases in

energyefficiencyinthebuildingsector;and,

largegaspowerplantsmightenterthemar-

ketasconsequenceofthephase-outofnu-

clearpower.

TheSwissgas industrysupportsSwissbi-

omethane and P2X technologies. The gas

associationVSGaimsatanannualbiome-

thaneproductionof4400GWhuntil2030

bybetterexploitingtheexistingpotential,

byusingP2Xtechnologiesandbyimports

underaninternationalregister.

Comparingtheproductioncostsofsynthetic

methane with the current average con-

sumerpricesfornaturalgasrevealsadif-

ference of about 100–180 CHF/MWh of

methane, equivalent to a CO2 tax level of

about 500–900 CHF per ton of CO2. The

currentpricefornaturalgasislowwithan

average across all customers of about 70

CHF/MWh(2018)includingtheCO2taxof

17.7CHF/MWh.Thispriceisexcludingvalue

added tax (VAT) and grid supply costs of

around10CHF/MWh.Thegasmarketoffers

gastariffsfor100%biomethaneofaround

150CHF/MWh–mostlyprivatecustomers

arewillingtopaythispremium.Biometh-

anepricesdonotneedto includetheCO2

tax,butprivatecustomershavetopayfor

grid supply fee and VAT. Thus, the price

differencebetweenbiomethaneandSNGis

muchsmallerthanthepricedifferencebe-

tweennaturalgasandSNG.

8.2 Hydrogen

BesidesSNG,hydrogenmightenterthegas

market,either integrated intothenatural

gasnetworkorwithaseparatedistribution

infrastructure. Today, the Swiss hydrogen

marketisverysmallcomparedtotheSwiss

naturalgasmarketwitharound1%of its

size.Hydrogenisusedforsmall-scaleindus-

trialapplications,e.g.topreventoxidation

inmanufacturingprocesses.Iflargequan-

titiesofhydrogenareneededforindustrial

processes, mainly in the chemical sector,

productionofhydrogenusuallytakesplace

on-site.Thisimpliesthathydrogenisoften

notagoodtradeonamarket.Hydrogenfor

mobilityiscurrentlynegligible.Duetothe

smallhydrogenmarket,nodistributiongrid

forhydrogenexists.However,hydrogencan

becanbeinjectedintheexistinggasgridto

amaximumof2%ofthetransportedvol-

ume of natural gas. There are discussions

aboutincreasingthemaximumvolumetric

injectionshareuptoaround10%,butfur-

therinvestigation(preferablyinaEuropean

context)isnecessaryinordertobetterun-

derstandtheimplicationsofhigherhydro-

gensharesfortheoperationofthegridand

fortheapplicationsattheend-users.

TheSwisshydrogenmarketisacompetitive,

unregulatedmarketwithsubstantialprice

variabilities.Consumerpricesarenotpub-

lically available. Current common prices

derivedfromindustrialcompaniesindicate

pricesforhydrogenproductionandtrans-

porttothecustomerofaround1CHF/Nm3

andaround10CHF/kg (equivalent to250

CHF/MWhth) for mobility applications. In

contrast to international literature, Swiss

hydrogenproducersclaimthattheirprices

forhydrogenproductionanditstransport

arethesameforsteammethanereforming

ofnaturalgasandelectrolysis.Mainreason

isthattransportofhydrogenwithtrailers

contributesmosttofinalconsumerprices

and therefore, the production route (elec-

trolysisorsteammethanereforming)does

notplaysuchanimportantrole.Besidethe

refineryinCressierandthechemicalplant

8 Power-to-X and the Swiss gas market

Synthetic methane can easily be stored over longer periods.

Synthetic methane is 2–3 times more expensive than natural gas today, but close to sales prices for biomethane.


inVisp,therearenobigchemicalindustries

in Switzerland that produce hydrogen as

cheap “by-product”. For decentralized hy-

drogendemand,Swisshydrogenproducers

expect that the future hydrogen demand

canbecoveredbyelectrolysisfedbyrenew-

ableelectricity,whichwouldrequireacon-

tinuouslow-costelectricitysupply.

Futureprospectsforhydrogenapplications

depend on the ambitions to reduce CO2

emissionsintheenergyend-usesectorsand

the competitiveness of hydrogen applica-

tions to alternative options. According to

model-basedanalyses,thedirectuseofhy-

drogentosatisfyenergydemandcangrow

towards2050toabout3TWh/a(2%offinal

consumption),ifstringentclimatepolicies

willbeinplace.

Today, the hydrogen market in Switzerland is very small with price varabilites and no centralized distribution infrastructure.


9.1 Aviation

Syntheticelectricity-basedfuelsrepresent

oneofthefewCO2emissionreductionop-

tionsforaviation,which isentirelybased

on fossil fuels and exhibits large growth

ratestoday.Replacingliquidfuelsandcur-

rentairplanetechnologywithelectricpro-

pulsionsystemsisdifficultbecauseofthe

highfuelenergydensityrequired.

Currently, there is no legal obligation to

accountGHGemissionsfrominternational

aviationandreducetheseemissions.How-

ever,in2016,191memberstatesoftheIn-

ternational Civil Aviation Organization

(ICAO),includingSwitzerland,agreedonthe

Carbon Offsetting and Reduction Scheme

forInternationalAviation(CORSIA)[31].It

aimsatfreezingCO2emissionsat2020lev-

elsandatcarbon-neutralgrowthfrom2021

on. Synthetic aviation fuels might play a

major role in achieving these goals. Since

regulationsarenotyetfinalizedandsince

productiontechnologiesforliquidsynthetic

fuelslikee-kerosenearenotyetavailableat

largescale,thefollowingwillfocusonroad

transport.

9.2 Road transport

SyntheticP2Xfuelscanreducethecarbon

footprint of road transport, which is cur-

rently responsible for almost 40% of the

Swiss domestic CO2 emissions. Passenger

carscontributearoundtwothirdsofthese

emissions.Asubstantialandquickreduc-

tionofmobilityrelatedGHGemissionsre-

quiresdrasticchangesofvehicletechnolo-

giesandfuels.Evaluatingthepotentialof

synthetic fuels needs to distinguish be-

tween new and existing vehicles – both

needtobeaddressed.

While new vehicles can be electrified di-

rectlyviaelectricdrivetrains(BEVorFCEV),

theexistingfleetcanbeelectrifiedindirectly

9 Power-to-X and the transport sector

Figure 9.1: Direct vs. indirect electrification of cars and trucks. Left panel [33]: Trade-off between specific energy demand and range for cars (red), rigid trucks (18t, blue) and articulated trucks (40t, green). The hyperbolic curves indicate the amount of energy that is stored in a vehicle. The displayed two curves show specific battery capacities corresponding to currently available vehicles. Their intersection with the typical specific energy demand of each vehicle type results in the maximum distance that can be driven without recharging. Hence, the area below the three curves in the plot indicates the application space for BEV (direct electrification). Right panel (adopted from [33]): Share of observed day trip performance that can directly be electrified (as share of total vehicle kilometers) given the maxi-mum range identified in the left panel. Calculations based on [32].

98.2%

53.9%

4.4%

46.1%

95.6%

1.8%

directly electrifiablenot directly electrifiable

Day

trip

per

form

ance

of v

ehicl

es


with synthetic fuels based on renewable

electricity.Commonlifetimesofpassenger

vehicles(10–20years)setatemporallimit

forthesubstitutionoftheexistingfleetwith

newtechnologies–conventionaldrivetrains

will still hold large vehicle shares in the

mid-term future and also existing infra-

structuresandtheirtransformationneedto

betakenintoaccount.

Technologyshiftsinthemobilitysectorare

partiallydeterminedbydrivingpatternsof

consumers [32]. Compared to the average

(shortdailytraveldistances),fewhigh-mile-

age vehicles contributedisproportionately

tothetotalmileageoftheSwissvehiclefleet.

Thesharesofshort-vs.long-distancedrivers

correlate with the shares of directly and

indirectlyelectrifiablevehiclesdepictedin

therightpanelofFigure9.1.Currently,not

allnewvehicletechnologiescansatisfyall

drivepatterns.Batteryelectricvehicles(BEV)

arelimitedintermsofrange–currentpas-

sengervehicleshaverangesintheorderof

200–400 km, small trucks around 250 km

(left panel of Figure 9.1); battery electric

heavy-dutytrucksarehardlyavailableyet.

Figure9.1showsthattheindirectelectrifi-

cationofthetruckfleetinparticularoffers

greatapplicationpotentialforsyntheticfu-

els,astherangeofapplicationsforbattery

electricvehiclesislimitedhere.Relyingon

existingvehicletechnologyallowsforben-

efits ofscale,and hence,economicadvan-

tages.

Considering the entire energy conversion

chain (well-to-wheel), vehicles operated

withP2Xfuelsneedroughly2–4timesmore

electricitythanBEV.However,P2Xtechnol-

ogiesallowbothgeographicalandtemporal

(bothshort-andlong-term)decouplingof

fuelproductionanduse,whichcanbean

importantassetinafutureenergysystem

withhighsharesofintermittentrenewable

powergeneration.Anoptimalcombination

ofthehighefficiencypotentialofBEVand

flexibility potential offered by P2X fuels

mightleadtoamoresubstantialCO2reduc-

tion than BEV alone. Direct and indirect

electrification (viaBEVandP2Xfuels)are

thereforecomplementary

Thetotalcostofownership(TCO)ofpassen-

gercarsshowrathersmallsharesofenergy

costs (fuel/ electricity) compared to other

costcomponents(Figure9.2).Thishaspos-

itive implications for the deployment of

synthetic fuels. Without taxes, synthetic

fuelsarecurrently2–3timesmoreexpen-

sivethanfossilfuels(atthefillingstation).

Fueldistributionandfuelinginfrastructure

costsforSNGandhydrogenstronglydepend

onthedegreeofutilization–themoreSNG

vehiclesandFCEVinoperation,the lower

thecostsperfueledenergyunit.Thisoppo-

sitetoBEV:themoreBEVchargedfromthe

grid,thehighertheexpensesforpowerlines

andchargingstations.

Figure 9.2 shows the impact of increased

salesandapotentialmonetizationofCO2

emission reduction for compact SNG cars

comparedtocurrentgasolinecarsorBEVin

termsofannualcosts.Whilethetotalcost

of ownership are substantially higher for

SNG (P2M) cars today, increasing market

shares(from0.3%to1.2%)andmonetizing

CO2 reductions according the CO2 regula-

tionsforthenewpassengercarfleetwould

resultinverysimilarannualcostsforboth

gasolineandSNGvehicles.

Essentially,P2Xfuelscanbecomecompeti-

tiveundercertainconditions:

1. AhighdegreeofmaturityofP2Xtech-

nologies.

Thismaturityisgiventodayforhydro-

genandmethaneproductioninmid-size

Figure 9.2: Total cost of ownership (TCO) calculation for a gasoline vehicle as reference, a BEV, and vehicles using CNG or SNG (P2M), both with a basic market penetration of 0.3%. P2M vehicle costs are also calculated considering the following cost reduction effects: (1) increased market penetration of CNG vehicles from 0.3% to 1.2%; (2) reduced purchase price due to increased sales volumes; (3) considering environmental benefit of the vehicle; (4) con-sidering environmental benefit of the synthetic fuel.

Long-distance, heavy-duty vehicles as first P2X targets in mobility.

Driving patterns determine preferred fuels.

PerspectivesofPower-to-XtechnologiesinSwitzerland–AWhitePaper

23

Thetotalcostofownership(TCO)ofpassengercarsshowrathersmallsharesofenergycosts(fuel/electricity) compared toother cost components (Figure9.2). Thishaspositive implications for the

deployment of synthetic fuels.Without taxes, synthetic fuels are currently 2-3timesmoreexpensivethanfossilfuels(atthefillingstation).FueldistributionandfuelinginfrastructurecostsforSNGandhydrogenstronglydependonthedegreeofutilization–themoreSNGvehiclesandFCEVinoperation,thelowerthecosts

per fueledenergyunit.Thisopposite toBEV: themoreBEVcharged fromthegrid, thehigher theexpensesforpowerlinesandchargingstations.

Figure9.2showstheimpactofincreasedsalesandapotentialmonetizationofCO2emissionreductionforcompactSNGcarscomparedtocurrentgasolinecarsorBEVintermsofannualcosts.WhilethetotalcostofownershiparesubstantiallyhigherforSNG(PtM)carstoday,increasingmarketshares(from 0.3% to 1.2%) and monetizing CO2 reductions according the CO2 regulations for the newpassengercarfleetwouldresultinverysimilarannualcostsforbothgasolineandSNGvehicles.

Figure9.2:Totalcostofownership(TCO)calculationforagasolinevehicleasreference,aBEV,andvehiclesusingCNGorSNG(PtM),bothwithabasicmarketpenetrationof0.3%.PtMvehiclecostsarealsocalculatedconsideringthefollowingcostreductioneffects:(1)increasedmarketpenetrationofCNGvehiclesfrom0.3%to1.2%;(2)reducedpurchasepricedue to increased sales volumes; (3) considering environmental benefit of the vehicle; (4) considering environmentalbenefitofthesyntheticfuel.

Essentially,P2Xfuelscanbecomecompetitiveundercertainconditions:

1. AhighdegreeofmaturityofP2Xtechnologies.

This maturity is given today for hydrogen and methane production in mid-size P2X plants.Syntheticliquidfuelproductionisnotyetonthesamelevel,butissupposedtoachieveitsoon.

2. AbroadrolloutisneededforaneconomicimplementationofaP2Xfuel.

Whilethiswouldbeeasyforsynthetic liquidfuelsrelyingontheexistingvehicles, logisticsandfillingstations,itismorechallengingforSNG.MarketsharesfornewlysoldSNGvehicleswouldhavetobesubstantiallyincreasedtoatleast2-4%.Onlysuchmarketsharesallowforamortizationofhighfuelingstationinvestmentcosts.

3. Abeneficialregulationframework.

Within the draft CO2 regulations for passenger cars and light duty trucks in Switzerland, CO2reductiondue to synthetic fuels is taken intoaccountand theenvironmentalbenefitsmaybemonetized(see(4)inFigure9.2).

Theentrypointforhydrogenmightbeheavy-dutytrucks,giventheexemptofelectricpowertrainsfromtheheavygoodvehicletax(LSVA).Thisrepresentsanimportantbenefit,since50%ofTCOof

0

2'000

4'000

6'000

8'000

10'000

12'000

Gasoline(Ref.)

BEV CNG0.3%

PtM0.3%

PtM1.2%

PtMScale_Fz

PtMeB_Veh

PtMeB_Fuel

CostsinCH

F/a Diff.toStd-FuelTax

FuelTax

EnergyCosts

OperationalCostsw/oFuel

CapitalCosts

Economiclimit

(1) (2) (3) (4)

Ø Long-distance,heavy-dutyvehiclesasfirstP2Xtargetsinmobility.


P2Xplants.Syntheticliquidfuelproduc-

tionisnotyetonthesamelevel,butis

supposedtoachieveitsoon.

2. A broad rollout is needed for an eco-

nomicimplementationofaP2Xfuel.

Whilethiswouldbeeasyforsynthetic

liquidfuelsrelyingontheexistingve-

hicles,logisticsandfillingstations,itis

more challenging for SNG. Market

shares for newly sold SNG vehicles

wouldhavetobesubstantiallyincreased

toatleast24%.Onlysuchmarketshares

allowforamortizationofhighfueling

stationinvestmentcosts.

3. Abeneficialregulationframework.

Within the draft CO2 regulations for

passengercarsandlightdutytrucksin

Switzerland,CO2reductionduetosyn-

thetic fuels is taken into account and

the environmental benefits may be

monetized(see(4)inFigure9.2).

The entry point for hydrogen might be

heavy-dutytrucks,giventheexemptofelec-

tricpowertrainsfromtheheavygoodvehi-

cletax(LSVA).Thisrepresentsanimportant

benefit, since 50% of TCO of heavy-duty

trucks are statutory levies (LSVA and fuel

tax). Due to the exemption of statutory

levies for electric powertrains, hydrogen

drivenfuelcelltrucksmayhavesimilarTCO

as diesel trucks already today, even if the

truckpurchasepriceisthreetimeshigher

(Figure 9.3). Hydrogen fuel cell passenger

vehicles,however,donotprofitfromsuch

boundaryconditions:duetothehighpur-

chaseprice,thecapitalcostsrisesubstan-

tiallyandarenotcompensatedforbylow

operationalcosts.

While gaseous fuels (P2M) require an area-wide construction of gas filling stations, synthetic liquid fuels (P2L) can be integrated directly into the existing infrastructure.

PerspectivesofPower-to-XtechnologiesinSwitzerland–AWhitePaper

24

heavy-duty trucks are statutory levies (LSVA and fuel tax). Due to theexemptionofstatutoryleviesforelectricpowertrains,hydrogendrivenfuelcelltrucksmayhavesimilarTCOasdieseltrucksalreadytoday,evenifthetruckpurchasepriceisthreetimeshigher(Figure9.3).Hydrogenfuelcellpassenger

vehicles,however,donotprofitfromsuchboundaryconditions:duetothehighpurchaseprice,thecapitalcostsrisesubstantiallyandarenotcompensatedforbylowoperationalcosts.

Figure9.3:TCOcalculationfora28ttruckusingdiesel,syntheticdieselormethane,orhydrogenwithafuelcell(H2).

10 Power-to-Xinindustry

10.1 TheroleofhydrogenHydrogenisamajorenergycarrierandfeedstockforproductionofbasechemicals,syntheticfuelsandlubricants.Hydrogencanalsobeusedasreductiongasorinertgas,forinstanceintheironoreindustryaswellasforflatglassproduction.Insomeindustrialproductionprocesses,hydrogenisaby-productandeithersoldorusedelsewhere,whichisthecaseforhydrocarboncrackinginrefineries,fortheChlorine-alkalielectrolysisandfortheproductionofacetylene.Inlargeproductionclustersofthe chemical industry (e.g. in Leuna/Bitterfeld and in theareaofHamburg inGermany)hydrogennetworksconnectproducersandconsumers.Largeproductionfacilitiesandintegratednetworksforchemicalproductsallowforsupplyinghydrogenatcomparatively lowcosts. Insuchnetworks,P2Xtechnology can be integrated as complementary hydrogen supply technology. Often, industrialprocessesruncontinuouslyandrequirereliableinputoffeedstocksuchashydrogen.Therefore,P2Xtechnologies with intermittent renewable electricity supply need to be designed with sufficientproduction capacities integrated hydrogen storage to prevent feedstock supply interruption. ThecompetitivenessofhydrogenfromP2Xtechnologies,however,dependssubstantiallyontheexistenceof stringentclimatepolicy,given thecurrent lowhydrogensupplycosts resulting fromproductionfromfossilfuels.

10.2 SwissindustryInSwitzerland,theindustrysectoraccountedfor18%ofthefinalenergydemandin2015,withnaturalgasandelectricityaccountingformorethan60%ofthetotalindustrialenergydemand.Almosthalfofthefinalenergydemandwasusedforthegenerationofprocessheat.Withmorethan20%shareoftheindustry’sfinalenergyconsumption,thechemicalindustryrepresentsoneofthesectorswiththehighestconsumption.Converselytoothercountries,wheremass-productionofbasicchemicals

020'00040'00060'00080'000

100'000120'000140'000160'000180'000200'000220'000

Diesel syn.Diesel syn.CH4 H2TotalCosto

fOwne

rship(TCO

)inCH

F/a

w/oLSVAexemptionw/ofueltaxexemptionLSVAFuelTaxcostsFuelEnergycostsOperationcosts(w/ofuel)Capitalcosts

Ø Abroadroll-outofP2Xfuelsrequiredtorecoverinfrastructurecosts. Figure 9.3: TCO calculation

for a 28t truck using diesel, synthetic diesel or methane, or hydrogen with a fuel cell (H2).


10.1 The role of hydrogen

Hydrogen is a major energy carrier and

feedstockforproductionofbasechemicals,

synthetic fuels and lubricants. Hydrogen

canalsobeusedasreductiongasor inert

gas,forinstanceintheironoreindustryas

well as for flat glass production. In some

industrialproductionprocesses,hydrogen

isaby-productandeithersoldorusedelse-

where, which is the case for hydrocarbon

crackinginrefineries,fortheChlorine-alkali

electrolysisandfortheproductionofacet-

ylene. In large production clusters of the

chemicalindustry(e.g.inLeuna/Bitterfeld

and in the area of Hamburg in Germany)

hydrogennetworksconnectproducersand

consumers.Largeproductionfacilitiesand

integratednetworksforchemicalproducts

allowforsupplyinghydrogenatcompara-

tivelylowcosts.Insuchnetworks,P2Xtech-

nologycanbeintegratedascomplementary

hydrogensupplytechnology.Often,indus-

trialprocessesruncontinuouslyandrequire

reliableinputoffeedstocksuchashydrogen.

Therefore,P2Xtechnologieswithintermit-

tentrenewableelectricitysupplyneedtobe

designedwithsufficientproductioncapac-

itiesintegratedhydrogenstoragetoprevent

feedstocksupplyinterruption.Thecompet-

itiveness of hydrogen from P2X technolo-

gies,however,dependssubstantiallyonthe

existenceofstringentclimatepolicy,given

thecurrentlowhydrogensupplycostsre-

sultingfromproductionfromfossilfuels.

10.2 Swiss industry

In Switzerland, the industry sector ac-

countedfor18%ofthefinalenergydemand

in 2015, with natural gas and electricity

accountingformorethan60%ofthetotal

industrial energy demand. Almost half of

thefinalenergydemandwasusedforthe

generationofprocessheat.Withmorethan

20% share of the industry’s final energy

consumption,thechemicalindustryrepre-

sents one of the sectors with the highest

consumption.Converselytoothercountries,

wheremass-productionofbasicchemicals

representsasignificantshareofthechem-

ical industry, the Swiss chemical sector is

veryversatile.Itproducesmorethan30’000

products and rather targets production of

specialized products, e.g. pharmaceutical

products,vitamins,finechemicals,andsub-

stancesfordiagnosticsandplantprotection.

Hydrogen consumption in Switzerland in

2018amountedtoabout13’000tons.The

refinery in Cressier represents the largest

singleconsumerwithabout85%ofthetotal

consumption [34]. Other small-scale con-

sumersbelongtothewatchindustry,chem-

ical and pharma industry, and synthetic

stoneproduction.About90%ofthehydro-

genisproducedfromfossilfuels.Hydrogen

for the refinery is produced on-site from

naphta and methane, hydrogen for the

LONZAchemicalplantinVispfromliquefied

petroleumgas.Asmallfractionisproduced

fromelectricityeitherviachlor-alkalielec-

trolysisorwaterelectrolysis.Sincetheclo-

sureofthefertilizerproductioninVispin

early2018,whichwasbesidestherefinery

a major consumer of hydrogen, there is a

significant overcapacity in hydrogen pro-

duction in Switzerland with about

21’500t/a.

10 Power-to-X in industry Swiss refinery is largest hydrogen consumer, further small-scale consumers in chemical industry.


Combiningdifferentapplicationsandthus

thepotentialofservingdifferentmarkets

isakeyadvantageofP2Xtechnologies.The

differentpathwaysofP2Xallowforanum-

berofdistinctapplications,servingthedif-

ferentmarketsdescribed.Accordingly,busi-

nesscasesofP2Xcanpotentiallybuildon

multiple revenue streams. From an eco-

nomicpointofview,themulti-market/ap-

plication nature of P2X has two main ad-

vantages:

1. Itprovidestheoptiontoexpandanin-

vestmentinthefuturebyaddingfurther

processsteps

2. Theavailabilityofseveraldistinctmar-

ketsallowsforoperationalflexibility

Severalapplicationscanalsobecombined

withtheprovisionofancillaryservicesfor

powergrids.Thepossibilitytoservediffer-

entmarketsnotonlypotentiallyincreases

revenues, but also potentially affects the

overallmarketriskexposureandhencethe

costofcapitalofinvestmentprojects.The

extent,towhichthemulti-marketflexibility

creates a valuable real option (either in

extensioninvestmentorinproductionflex-

ibility) and accordingly improves the risk

profileofinvestmentprojects,dependson

thecorrelationofpricesthatcanbeachieved

on the different markets. Due to the low

correlationsofpricesfornaturalgas(meth-

ane),electricityandcapacityreserves,the

combination of these strands can lead to

loweroverallrisks.The“realoption”ofex-

tending for instance an electrolysis plant

withamethanationprocesscouldtherefore

becomerelevantinthefuture.

Thekeylimitationforthecombinationof

applicationsisthelocationoftheP2Xplant,

whichdeterminestheaccessto(low-cost)

electricity,thegasnetwork,apotentialheat

network,aswellasaCO2source.Giventhe

magnitude of investment costs for utili-

ty-scaleP2Xunits,theirlocationshouldbe

chosenwiththeoptionalityforlaterexten-

sioninmind.

11 Integration of Power-to-X in multiple markets

Revenues from selling products and services on different markets would increase profitability of P2X.


12.1 Strengthening the domestic market

WhilecurrentlyP2Xtechnologiesstillcomes

athighcosts,thereareseveralimplications

forpolicymakerswhoaimtoenableorin-

ducelearning-by-doing,-using,and-inter-

actingandtherebydriveP2Xdownalong

its cost learning curve. Political deci-

sion-makerscantakemeasurestopromote

P2Xtechnologiesviatheincentiveoflearn-

ingprocesses.Asmostsub-systemscanbe

regarded design-intensive technologies,

learning-by-usingandinteractionoftech-

nology integrators with technology users

seemtobethemostrelevantlearningpro-

cesses.Tothisend,ahomemarketiscondu-

cive,characterizedbystabledemand[35].

Accordingly,policiesstrengtheningthedo-

mesticmarketrepresentmoreeffectivein-

novation policies than mere technology

subsidies.Duetotherelativelylowmanu-

facturing complexity of the components,

large and increasing market scale for the

production of P2X components is not re-

quired,whichcouldberegardedunrealistic

anywayinthecaseofSwitzerland.

DuetothelowcomplexityofpurePower-

to-Hydrogen-to-Power technology setups,

substantial learning-by-using, -doing- or

-interactingeffectscannotbeexpected.This

isdifferentformethanation,FischerTropsch

and methanol setups. Expert interviews

pointoutthateconomiesofscalearepar-

ticularlyrelevantincaseofthelattertwo

sub-systems. Hence, for setups including

either or both of these processes, large

plants would be required. Given Switzer-

land’smarketsize,thisseemsoverlyambi-

tious.Consequently,R&Dsupporttoenable

learning-by-searchinginP2Xsetupsusing

Fischer-Tropschand/ormethanolreaction

seemstobeamorerealisticoptioninSwit-

zerland.Inaddition,researchandtechnol-

ogy demonstration collaborations with

countriesthathavelargerpotentialmarket

sizes can be an option. Policy supporting

methanation setups, where economies of

scale are not as important as for e.g., Fis-

cher-Tropsch,seemsmoreappropriatefor

Switzerlandfromaninnovationpolicypoint

ofview.

12.2 Interaction between producers and users

SupportingP2Xplantsindifferentuseen-

vironments(usingdifferentCO2andpower

sources) could result in higher learn-

ing-by-using than simply supporting one

standardized setting. In order to increase

theuser-producerinteraction,networksof

localusers,producersandregulatorsshould

beformedaroundtheseprojects.Tothisend,

oneoptionwouldbetomakegrantsonly

availabletoconsortiathatincludeusersand

producers. Furthermore, performance in-

centivesshouldbeconsidered,e.g.,bypro-

viding grants for innovative product fea-

tures. At the same time, policy support

shouldbeadjustedperiodicallytoaccount

fortechnologicallearningandtheresulting

costreductions.Toenablecost-basedadjust-

ments,policysupportshouldbetiedtore-

porting of cost and performance data (at

leasttothepolicymaker).Finally,inorder

toreducethecostofdeploymentpoliciesfor

such P2X setups, de-risking tools, which

reduce the financing cost of P2X projects,

couldbeused(e.g.,throughSFOE’sTechnol-

ogyFund).

12 Power-to-X and innovation policy

Stable innovation conditions needed to facilitate learning-by-using on domestic markets.

Research and innovation should focus on optimal integration of P2X in the energy system.


13.1 General regulations

General legal regulationsthatapplytoall

P2Xplantsconcernplanningandapproval

procedures,environmentallaw,safetyreg-

ulationsandthestatusofP2Xasfinalcon-

sumer.Regardingstructuralplanning,P2X

plants are probably not required to be in-

cludedinthestructureplan,sinceunitsizes

and impacts on landscape are relatively

small.Safetyregulationsneedtobeconsid-

ered,ifhydrogenandmethaneareproduced.

13.2 Status of P2X systems as final consumers and power plants

Thereisambiguityinthelaw,whetherP2X

must be regarded as “final consumer” – if

regarded as “final consumer”, P2X plants

wouldhavetopayelectricitygridfees.An

attempttoexplicitlyclassifyallstoragesys-

temsexceptforpumpedhydrosystemsas

finalconsumersinarevisedElectricitySup-

plyOrdinancewaswithdrawnaftersignif-

icantcriticismduringtheconsultation.

RegulationrelatedtoP2Xsystemsthatfeed

electricity back into the grid would allow

defining P2X technology as power plants,

whichwouldallowforparticularconditions

forthelocationandforelectricitygridac-

cess.Legaluncertaintyexistsregardingthe

treatment of the power output of P2X di-

rectlyconnectedtorenewablepowersupply:

Ideally,thelawwouldsupportthedefinition

of the electricity output as renewable, if

correspondingsourcesoforiginfortheelec-

tricity used in electrolysis can be verified.

Suchaprovision,however,ismissinginthe

lawsofar.

13.3 P2X as grid investment

Ifthefeed-inofelectricityfromrenewable

sourcesnecessitatesinvestmentsintoP2X

technologiesatthedistributiongridlevel,

suchcostscouldbereimbursedunderthe

Electricity Supply Ordinance. In this case,

ElComwouldhavetoapprovethecostsand

Swissgridwouldhavetoreimbursethedis-

tributiongridoperator.Whileinvestments

infutureinfrastructureareoftensubjectto

regulatory scrutiny, recent legislation has

introducedtheoptiontoreimbursecostsof

certaininnovativegridmeasures.

13.4 Unbundling rules

Determinedbytheunbundlingrules,Swiss

law distinguishes responsibilities of elec-

tricityproducers,transmissionsystemop-

eratorsanddistributorsofelectricity,which

might prohibit certain electricity market

actorstooperateP2Xsystems.Accordingto

theunbundling law,electricityproducing

companiesareallowedtooperatestorages,

andhenceP2Xtechnology.Forcompanies

operatingadistributiongrid,Swisslawcalls

fortheunbundlingofthefinancialreporting

only. Consequently, such operators would

likelybeabletooperateP2Xunits,aslong

as these activities are separated from the

gridoperationinthefinancialreportingand,

interalia,nocross-subsidisationtakesplace.

Conversely,Swissgrid,thetransmissionsys-

temoperator,isnotallowedtoparticipate

intheproductionofelectricity.

13.5 Gas market regulations

Biogasandsyntheticmethanearealready

partiallyincludedintheSwissgasmarket

regulationsanddirectives.Thegasgridac-

cessofP2X-facilitiescanbeensuredthrough

thePipelineActortheCartelAct.However,

P2Xoperatorslikelycannotrelyonthe“Ver-

bändevereinbarungzumNetzzugangbeim

Erdgas”,sincethisdocument isgearedto-

wardslargeconsumersofgas,notproducers

thatwanttofeedthegasintothegrid.

13.6 Regulations regarding the transport sector

Lawaffectingthetransportsectormaylead

toincentivesforimportersoffossilfuelsto

investinP2Xinordertocompensatefora

shareofthecarbonemissionsresultingfrom

the fuels imported. This might create an

additionalrevenuestreamforP2X.Related

tothetreatmentofhydrogenandmethane

producedfrombiogenicsources,uncertainty

existsregardingthecalculationofthecarbon

intensityofgasfueledvehiclesbasedonthe

biogenousshareofthegasmixture.Thelaw

onthemineraloiltaxisexplicitaboutthe

treatmentofbiogenicfuels.Whenusedas

fuel,hydrogen,syntheticmethane,metha-

nolandothersyntheticfuelsfromP2Xare

exemptfromtheMineralOilTaxiftheen-

ergyusedoriginatesfromrenewablesources

andcertainenvironmentalcriteriaaremet.

13.7 Regulations regarding the heating sector

TheCO2taxlegislationthereforeoffersad-

vantagesfortheuseofP2Xproductsinthe

heatingsector.Regulationsaremainlystip-

ulatedbytheCantonalModelLawsonEn-

ergy(MuKEn2014),whicharenotdirectly

applicable,butwhichthecantonsmayim-

plement. Currently, however, renewable

gasesfromP2Xarenotacceptedaspartof

the standard solutions under the MuKEn.

Swiss law treats P2X differently than pump storage with negative implications on costs.

13 Legal aspects related to Power-to-X


DuetothefactthattheCO2taxonlyapplies

to fossil energy carriers, the carbon tax

legislationmayofferadvantagesfortheuse

ofP2Xproductsforheating,sincesynthetic

energycarriersdonotfallunderthisprovi-

sion.Thiswouldcreateanincentivetouse

biogenic synthetic fuels over fossil fuels.

Also,hydrogenandsyntheticmethaneused

asacombustibledonotfallunderthemin-

eraloiltax.

13.8 Regulative impact on business models

The legal framework has several implica-

tionsforP2Xbusinessmodels–inparticu-

lar regarding the currently debated ques-

tion,whethergridfeeshavetobepaid. If

thiswerethecase(asitwasenvisagedin

the consultation draft of the revised Elec-

tricitySupplyOrdinance),thiswould:

• lowertheoverallprofitabilityofanyP2X

installation that stores electricity from

thepublicgrid

• setincentivestonolongerusethepublic

grid, but store electricity directly from

renewableelectricityproductioninstead

Thelatter incentivemayhavefurther im-

plications. Industrial carbon sources are

often not situated close to (decentralized)

renewable electricity generation. Since a

potentialdutytopaygridfeeswouldincen-

tivizetheinstallationofP2Xplantscloseto

renewable electricity sources, this would

limit the opportunities to use industrial

large-scale carbon sources. However, grid

feesforelectricityconsumptionofP2Xmay

set incentives for the use of other CO2

sourcesfortheproductionofsyntheticgases

orfuels,suchasdirectaircapture,probably

associated with higher CO2 costs, if local

cheapelectricityisnotavailable.Clearly,the

legislativeframeworkcanimposesubstan-

tialimplicationsforthedeploymentofnew

technologies,andneedstobedesignedto

supportthoseoptionsthatcontributeeffec-

tivelytothesuper-ordinatedgoals.

Applying equal electricity grid fees across different storage technologies is key for the competitiveness of P2X.


The authors thank the Swiss Innovation

Agency Innosuisse and the Swiss Federal

OfficeofEnergyfortheirfundingoftheJoint

ActivityoftheSwissCompetenceCenters

forEnergyResearch(SCCER)whichresulted

inthisWhitePaper.Theauthorsalsowish

toexpresstheirgratitudetoAymaneHassan

andAdelaideCalbry-Muzykafortheirsup-

portrelatedtolanguagetranslationaswell

astoMonikaBlétryforlayoutingtheWhite

Paper.

BatteryElectricVehicles(BEV)

Capitalcosts(CAPEX)

CarbonOffsettingandReductionSchemefor

InternationalAviation(CORSIA)

CompressedAirEnergyStorages(CAES)

CompressedNaturalGas(CNG)

ElectricVehicle(EV)

EmissionTradingSchemeoftheEuropeanUnion(EUETS)

FuelCellElectricVehicle(FCEV)

GreenhouseGas(GHG)

Heavygoodsvehicletax(LSVA)

HigherHeatingValue(HHV)

InternationalCivilAviation

Organization(ICAO)

InternalCombustionEngine

Vehicle(ICEV)

LifeCycleAssessment(LCA)

LowerHeatingValue(LHV)

Megawatt-electric(MWe)

Methanol-to-Olefin(MTO)

NaturalGas(NG)

OperationandMaintenance(O&M)

OxymethyleneEther(OME)

Operationalcosts(OPEX)

PhotoVoltaic(PV)

Power-to-Hydrogen:P2H

Power-to-Liquids:P2L

Power-to-Methane:P2M

Power-to-Power:P2P

Power-to-X:P2X

PolymerElectrolyteMembrane(PEM)

ResearchandDevelopment(R&D)

SolidOxideElectrolysisCells(SOEC)

SwissFederalOfficeofEnergy(SFOE)

SyntheticNaturalGas(SNG)

TotalCostofOwnership(TCO)

ValueAddedTax(VAT)

Well-to-Wheel(WTW)

14 Acknowledgements 15 Abbreviations


• Alkalineelectrolysis:usesanalkalinesolu-

tion,e.g.sodiumhydroxideorpotassium

hydroxide, as an electrolyte and is the

most mature technology commercially

available for hydrogen production with

efficienciesintherangeof50–70%

• Ammoniasynthesis:hydrogeniscatalyt-

icallyreactedwithnitrogen(derivedfrom

processair)toformanhydrousliquidam-

monia:N2+3H212NH3

• Anaerobicdigestion:chemicalprocesses

inwhichorganicmatterisbrokendown

bymicroorganismsintheabsenceofox-

ygen 1

• Ancillary services: markets for grid bal-

ancing(frequencyregulation)

• Biogasupgrading:refinesrawbiogasinto

cleanbiomethane(removalofimpurities)

whichcanbetheninjectedinthenatural

gasgrid 2

• BiogenicCO2sources:supplyofCO2based

onconversionofwoodresiduesthrough

indirectwoodgasificationandmethana-

tionoftheproducedgas,followedbyCO2

removal

• Biogenicsubstrates:sewagesludge,green

wastes,agriculturalresiduesandmanure

• Biological reactor: uses methanogenic

microorganismsunderanaerobiccondi-

tions

• Chlorine-alkalielectrolysis:chemicalpro-

cessfortheelectrolysisofsodiumchloride

producingchlorineandsodiumhydroxide

• CHP:adevicethatusesaheatengineor

apowersourcetoproduceelectricityand

usefulheat

• CO2emissionscertificates:quantityofCO2

emissionsbeingpartofatradingscheme

• Co-electrolysismode:producingsynthetic

gasfromwatersteamandcarbondioxide

• Compressed Air Energy Storages (CAES):

electricitystoragetechnologyuseingelec-

tricity to compress air that is stored in

undergroundformations(saltorrockcav-

ernsorabandonedmines)orintanks(P2G

inSwitzerland);expansionofcompressed

airgenerateselectricity

• Decentralisedgeneration:electricitypro-

ducedindecentralizedrenewablepower

plantssuchassolarPVandwind

• Digitaliseddemand:smartmeters,energy

management systems, automated de-

mandresponseormicrogrids 3

• Directaircapture:carboncapturemethod

thatseparatesCO2fromair

• Electricityproductioncosts:aneconomic

indicator of the total costs of building,

operatinganddecommissioningapower

plantoveritslifetimeperunitofenergy

production

• Electrolysis:electro-chemicalprocessthat

convertselectricityandwaterintoagas-

eousformofenergy(hydrogenandoxy-

gen)

• EmissionTradingSchemeoftheEuropean

Union(EUETS):amarketwhereemission

allowancesandemissionreductioncer-

tificatesaretradedtherebyallowingfor

CO2emissionsreductionattheleastcost

• Endothermic reaction: chemical process

absorbingenergyintheformofheat

• Energysavingmeasures:measuresaiming

atreducingenergyconsumption(thermal

insulation,LEDlighting…)

• ENTSO-E:43electricitytransmissionsys-

tem operators from 36 countries across

Europe

• Fischer-Tropsch: processes converting

gases containing hydrogen and carbon

monoxidetohydrocarbonproducts:CO2

+H2"CO+H2O;CO+H2"CxHyOH+H2O

• Flexiblepowerplants:dispatchableelec-

tricitysuchasflexiblegaspowerplants

• Higher Heating Value: accounts for the

latentheatofwatervaporizationinthe

reactionproducts

• Hydrocarboncracking:hydrocarbonsare

splittedintosmallermoleculesbybreak-

ingcarbonbondsdependingonthetem-

peratureandpresenceofcatalysts

• Levelised cost: an economic indicator of

total cost to build and operate a power

plantoveritslifetimeperunitofenergy

output

• LifeCycleAssessment(LCA):providesin-

sightsontheenvironmentalperformance

ofproductsandservices,takingintoac-

countproduction,use,anddisposal/recy-

clingofproducts,supplychainsandre-

latedinfrastructure

• Lower Heating Value: assumes that the

latentheatofwatervaporizationinthe

reactionproductsisnotrecovered 4

• Methanation:hydrogenandcarbondiox-

idearecombinedthroughachemicalor

abiologicalcatalyticreaction

• Methanolsynthesis:hydrogenationofcar-

bonmonoxideorofcarbondioxide:CO2

+3H21CH3OH+H2O

• PolymerElectrolyteMembrane(PEM):uses

proton transfer polymer membranes as

electrolyte and separation material be-

tweenthedifferentsectionsoftheelec-

trolysiscell

• Power-to-X (P2X): Power-to-Hydrogen,

Power-to-Liquids,Power-to-Methane,Pow-

er-to-Power:aclassofinnovativetechnol-

ogiesthatuseanelectro-chemicalprocess

to convert electricity into a gaseous or

liquidenergycarrierorchemicalproduct

• Primarycontrolreserve:Maintenanceand

useofpowerplantcapacitytoensurethe

mainsfrequencyfrom50Hzto±200mHz.

• Pump storage: uses surplus power to

pumpwaterfromalowerreservoirtobe

storedinanupperreservoir

16 Glossary


• Reversemode:operationasafuelcellas

opposedtoelectrolysismode

• Secondarycontrolreserve:balanceselec-

tricitysupplyanddemand;operatesfor

upto15minutes

• Solidoxideelectrolysiscells(SOEC):Tech-

nologyinwhichwaterelectrolysisiscar-

ried out with a solid oxide or ceramic

electrolyte.

• Steammethanereforming:chemicalpro-

cessinwhichmethanefromnaturalgas

isheatedwithsteamtoproducecarbon

monoxideandhydrogen 5

• Syntheticliquidfuel:fuelsresultingfrom

the conversion of hydrogen into liquid

hydrocarbons

• SyntheticNaturalGas(SNG):syntheticgas

(substitutefornaturalgas)producedfrom

coalorelectrolysisforinstance

• Systemservices:Servicetoensuretheop-

eration of the electricity network (fre-

quencyregulation)

• TotalCostofOwnership(TCO):purchase

priceofanassetplusthecostsofopera-

tion 6

• Virtual power plant: a control system

consistingofdistributedenergyresources

(renewable energy such as solar, wind)

andflexiblepowerconsumers 7

• Well-to-Wheel(WTW):includesresource

extraction,fuelproduction,deliveryofthe

fueltovehicleandenduseoffuelinve-

hicleoperations 8

1 https://www.britannica.com/science/anaerobic-digestion

2 https://www.infothek-biomasse.ch

3 https://www.weforum.org/agenda/2016/03/perspective-distributed-digital-and-de-mand-side-energy-technology-implica-tions-for-energy-security/

4 https://h2tools.org/hyarc/calculator-tools/lower-and-higher-heating-values-fuels

5 https://www.studentenergy.org/topics/steam-methane-reforming

6 https://www.investopedia.com/terms/t/totalcostofownership.asp

7 https://www.next-kraftwerke.com/vpp/virtual-power-plant

8 https://definedterm.com/well_to_wheel_wtw


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