Power-To-X In The German Experience: Another In The List Of Growing Energy Transition Strategies

Windy days
Winds of change continue to blow across the global energy landscape as firms, the general public, and policymakers shift strategic directions to address goals of environmental sustainability that also recognize economic priorities. In Germany, winters are often wet and windy when the Westerlies blow. That’s good for renewables. Germany just had a full week of 65% renewable power, following another record year of 40% renewable power in 2018. On 3 March 2019, a windy Sunday, around 90% of all power consumption was covered by renewables supply.

The German power system is balanced by fossil power and significant export potential (on the order of 15% of peak demand). Still, the national grid is transmission-capacity constrained—when the wind turbines operate at full capacity in the north (around 50 GW), there is insufficient capacity to transport the excess to the south. Grid expansion is therefore a German priority, but progress has been slow.

German renewable power generation is dominated by solar PV and wind, both of which are variable, non-dispatchable resources. Given the policy objective to achieve 65% renewable power share by 2030, a pressing question is how to manage surpluses and deficits in an economically and environmentally meaningful way. This is not only an issue for Germany; many countries/regions around the globe face similar challenges as they adjust to the energy transition.

Flexibility
A number of options exist to balance demand and supply. More power can be traded between regions, but these options can be limited in countries such as Germany where weather patterns among neighboring countries are similar. A second option is storage. Pumped hydro potential in Germany is limited, but pumped storage is being expanded in Austria and Switzerland. The significant hydro potential in Nordic countries offer considerable load management opportunity, and more transmission lines are being put in place. Battery use is on the rise, but still very limited—less than 1 GW in a 75 GW peak demand/85 GW peak generation power system. Enter “power-to-X”.

Power-to-X (also known as “power-to-gas,” “power-to-chemicals,” and “electrons-to-molecules”) uses electricity to produce hydrogen, synthetic methane, or liquid fuels such as ammonia or methanol. Althoughpower-to-X is not new, its stature has grown in recent years, and it presents distinct possibilities to store excess renewable power generated in times of relatively low demand which can improve the economic value of renewable generation by facilitating a classic storage arbitrage. Moreover, as renewable deployment continues to expand, power-to-X also has potential to help decarbonize other sectors of the economy, such as industry and transport, that have long vexed carbon mitigation specialists.No major technology breakthroughs have occurred in the power-to-X arena in recent years, although the potential to have large quantities of low-carbon surplus electricity has sparked intense interest in this concept.  

Power-to-X for hydrogen production creates some interesting opportunities. When hydrogen is produced close to power generation sources, it avoids electricity grid capacity constraints. In addition, hydrogen can be blended in relatively low concentrations (20%) with natural gas and transported in existing infrastructure with only modest operational changes; in some situations, hydrogen can be blended at much high percentages. Power-to-X for synthetic methane allows the use of existing natural gas distribution and storage infrastructure, as the gas can be stored in natural gas pipeline systems or underground for long periods of time, which can address seasonal variability constraints. Finally, power-to-X for the production of gaseous or liquid energy carriers facilitates sector coupling. For example, it can help in sector coupling in cases where electricity is not applicable or convenient, such as in aviation, iron and steel making, or chemical and petrochemical feedstocks.  

Today’s technologies and the German Experience
In Germany today, there are reportedly more than 50 power-to-X projects with a capacity of 55 MW in various phases of development from planning to operating, with 26 MW of installed electrical capacity representing a more than doubling since 2014. Power-to-X, as the name implies, can lead to the development of a variety of fuels, energy carriers, and energy services. Today, natural gas often serves as one of the main feedstocks for the production of hydrogen, ammonia and other fuels. In the future, cleaner versions of these products may depend on using hydrogen that is produced in novel ways, but both challenges and opportunities must be weighed in order to understand where work is needed.

• Hydrogen (H2) from electrolysis involves using electricity to split water to produce H2and oxygen. This is currently still more expensive than using natural gas (steam reformation), and an additional complication involves the challenge of building hydrogen infrastructure. The upside is that the technology can be used in a variety of zero-carbon applications, including long-haul and heavy-duty vehicles that present difficulties for electrification. A recent study on behalf of the German Gas and Water sector association (DVGW) concludes that power-to-Xcan contribute 74 to 164 TWh by 2050, equivalent to a quarter of current German gas demand. If complemented by up to 250 TWh of biogas, all of Germany’s gas supply could be CO2 However, while promising on both energy security and environmental grounds, such an outcome remains largely theoretical and aspirational. This stated, some strides are being made as some, although small, investment is occurring in this domain. In Linz Austria, Siemens is supplying a 6 MW PEM electrolyser to the steel industry that is scheduled for operation this year. A 10 MW PEM electrolyser is planned by Shell to come onstream in the Wesseling refinery near Cologne in 2020, provided by ITM Power from the UK. Transmission system operator Amprion and gas net operator OGE have presented aninvestment-ready plan for a 100 MW electrolyser and a dedicated hydrogen pipeline in the Northwest of Germany that could come onstream 2023, representing a 150 Million Euro proposal. Much larger scale investment will be needed for this technology to become a more dominant feature of the energy landscape, so the economic success of these first steps will be watched carefully.
• Synthetic Methane can be produced by combining H2and CO2using a methanation reaction. Like renewable ammonia, it currently relies on electrolysis to create hydrogen, and new ways of capturing carbon dioxide are still needed. Moreover, CO2is still released at the point of combustion, so the technology at best renders CO2to be a circular feedstock. Once produced, synthetic methane can be used just like natural gas, whose principle component is methane, or converted into other more complicated hydrocarbon molecules such as gasoline or jet fuel.
• Ammonia (NH3)is currently produced in an energy-intensive (Haber-Bosch) process that combines H2and nitrogen (N2) to form NH3, but new technologies are under development that could do this using electricity, reverse fuel cells, and other membrane reactors. There are trade-offs between efficiency and speed, but if power-to-X for renewable ammonia becomes economic, it could solve many of the most vexing climate, energy and food problems. Currently, this is a big “if”, but the benefits could be enormous. One benefit of ammonia is that it can act as a zero-carbon energy carrier that can be “combusted” without carbon emissions in modified turbines or used to release hydrogen for use in fuel cells, thus providing another pathway for a hydrogen economy.
• Methanol and other petroleum-like liquidscan be produced by combining carbon monoxide (CO) and H2to form methyl alcohol (CH3OH), a liquid at room temperature and pressure. The traditional process uses a fossil fuel such as natural gas to produce the hydrogen, but electricity can also be used to make the hydrogen through electrolysis or some other novel method. E-fuels is a new concept where hydrogen from electrolysis and CO2are converted into liquid fuels. This has the promise of creating a connection between renewable energy assets and the transportation sector that does not require a complete turnover of the vehicle fleet. But, costs are high, at present around 5 euros per litre diesel equivalent. In addition, e-fuels extend the life of internal combustion engine vehicles in the fleet mix, which extends the life of existing fuel delivery infrastructure, but also makes continued energy imports necessary.

Tomorrow’s reality
Forecasting anything is fraught with difficulty and predicting the pace and scale of energy sector transitions is no different. However, the role that technology is playing in the everyday lives of people around the world is changing rapidly, impacting virtually everything from telecommunications to modes of transportation to the quantity and composition of energy use. Hence, it is useful to understand the full portfolio of newinnovations as well as new applications of existingtechnologies that portend significant shifts in the winds of change. Power-to-X sits squarely in this domain, and its potential is now being actively explored. While its ultimate role in the future energy system is anything but certain, given its potential to shift the status quo by leveraging existing infrastructures as well as demanding new ones, a deeper exploration of the array of possibilities that power-to-X may provide is a useful exercise, especially as societies endeavor for environmental and economic sustainability.