Germany’s power-to-gas market powers ahead

Energy storage insiders are expecting German policymakers to reward power-to-gas (P2G) adoption as a logical next step to the country’s leadership in the field. “We expect a remuneration framework for P2G to emerge as part of an energy storage policy, which will provide impetus to the commercial adoption and roll out of systems in Germany,” said Dr Graham Cooley, chief executive of ITM Power.

“The procedures for installing, permitting and operating P2G plants in Germany are now well proven. We are aware that efforts continue to position P2G within the German energy policy.”

UK-based ITM Power is one of several P2G players with operational projects in Germany. The plants use excess power from the grid, usually available during times of high renewable energy production, to create hydrogen that can then be used for fuel-cell vehicles, injected into the grid or used to make methane.  

According to the Deutsche Energie-Agentur (dena), or German Energy Agency, there are more than 20 P2G research and pilot plants across Germany.
Dena’s Power to Gas Strategieplatform, which brings together players from industry, energy associations and academia, has published a roadmap aiming for 1 GW of P2G across Germany by 2022.

Meanwhile a public-private partnership called the Fuel Cells and Hydrogen Joint Undertaking has identified the potential for up to 170 GW of P2G in Germany “if 2050 decarbonisation targets are to be met,” according to a press release.

Cooley said P2G had several advantages as an alternative to electrical energy storage. “P2G systems can remain on, absorbing surplus energy for as long as necessary, and do not become fully charged like batteries, which are of finite capacity,” he said.

“Batteries are also limited by the need to discharge sufficiently before they can absorb surplus energy again, whereas P2G systems can be turned back on irrespective of the time varying pattern of excess energy availability.”

Cooley also claimed P2G could offer significant commercial benefits compared to battery storage.

“The other energy storage options need to sell power back to the electricity grid and are thus always constrained by the buy and sell prices applying in the electricity grid,” he said. “Ultimately the economic case for such technologies is self defeating. The opportunity to sell electricity at peak prices diminishes because their fundamental function is to fill valleys and clip peaks in the load profile.”

In contrast, he said: “P2G is not constrained in this manner and its utilisation factor can increase as the renewables penetration increases; it has a much greater degree of freedom because it operates across the electricity and gas systems.”

Not all energy experts are convinced, however. Gerard Reid, founder and managing partner of renewable energy finance consultants Alexa Capital, said: “The costs are too high. I don’t see roadmaps to getting costs down. And why do I need P2G? For long-term storage, I think there are cheaper solutions, such as biogas. Germany has 5 GW of biogas installation. Why would I not have that?”“Batteries are also limited by the need to discharge sufficiently before they can absorb surplus energy again, whereas P2G systems can be turned back on irrespective of the time varying pattern of excess energy availability.”