Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/242982
Authors: 
Bucksteeg, Michael
Mikurda, Jennifer
Weber, Christoph
Year of Publication: 
2021
Publisher: 
ZBW - Leibniz Information Centre for Economics, Kiel, Hamburg
Abstract: 
The expansion of wind and solar energy has primarily led to the decarbonisation of the electricity sector. Against this background, power-to-gas (PtG) is seen as a solution supporting the decarbonisation of other sectors, such as heating or transport. As the generation mix will transitionally be based on conventional generation technologies, the upcoming integration of PtG into electricity markets comes with several challenges. Notably, the design of environmental levies and carbon pricing should create efficient incentives for the utilisation of PtG, reflecting the value of the CO2 emissions avoided by hydrogen or methane. This contribution studies the role of the regulatory framework in the integration of PtG, with special attention to carbon pricing. We extend an optimisation model by the PtG technology and competing flexibilities, such as storage or demand-side management. We develop several scenarios with regard to levies, levels of CO2 price, techno-economic parameters of flexibilities and shares of variable renewable energy sources for the year 2025. We find that carbon pricing that considers the value of the CO2 emissions avoided by hydrogen or methane supports the market integration of PtG, whereas too low CO2 prices might lead to adverse effects. Subsequently, implications for energy policy are discussed.
Subjects: 
electricity market model
carbon pricing
power-to-gas
energy policy
JEL: 
Q4
Q5
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.