Synthetic Natural Gas Production: Production Cost, Key Cost Factors and Optimal Configuration

Abstract

The volatile nature of the renewable energy sources requires energy storage to compensate for the imbalances and to provide reliable base load. Power-to-Methane technology facilitates long-term high capacity renewable energy storage in the form of Synthetic Natural Gas (SNG) in the gas network. Unlike hydrogen, SNG usage in the network has no restrictions and natural gas appliances can operate on SNG. The two inputs required to produce SNG in the methanator are hydrogen and CO2 and they can be obtained from several sources. This leads to multiple possible process flow configurations in SNG production, each of them with varying performance. An optimization model has been developed in GAMS to analyse the performance of these various configurations. The objective of this research is to determine the optimal configuration, key cost factors and their effects on the production cost to identify the areas that require further development for cost reduction. This work also aims to determine the production cost per unit of SNG and the factors with most significant influence on the production cost by implementing a factorial design and a multivariate analysis (analysis of variance) approach. Methanator, electrolyser, biogas upgrader and hydrogen storage are considered as the fundamental process units in this work. The lowest production cost identified in the first year of production is 0.432 €/kWhSNG. The discounted production cost obtained shows that the lowest cost in 20 years from now is 0.143 €/kWhSNG. The variable with the most influence on the production cost is the capex of the methanator followed by the capacity of the methanator.