Dr. Andreas KoppE.ON Innovation Center Energy Storage

H2 in the economy – the strongest link in the energy chain?, DG Energy, European CommissionBrussels, 26.04.2013

Power to Gas – a promising solution to integrate large quantities of fluctuating renewable power

Reasons for energy storage

Variable generation Fluctuating demandwind power, solar power households, industry

Energy storage delivers balance and flexibility

Problem Sometimes deficit in

generation Sometimes grid congestion= Curtailment of RES

& Conventional Generation

3

Energy storage technologies

Pumped Storage P.Battery Capacitor

Heat Fly wheel

Power to Gas to Gridor to Caverns or to Power(A) CAES

Availability, Specification, Cost Effectiveness, Acceptance, Dimension

Proven Technology - Potential for improvement - New Technology

4

ElectrolysisMetering

Low voltage supply

pipelineconnection

Power supply

Power: 2 MWel Hydrogen production: 360 m³/h Fed into the local gas grid

(ONTRAS) Planned start of operation

Q3/2013 Owner is E.ON Gas Storage

Key Parameters

Control

Goals Demonstration of the process chain

Optimize operational concept (fluctuating power from wind vs. changing gas feed)

Gain experience in technology, costs, consenting

Example: E.ON Power to Gas Pilot "Falkenhagen"

March 2013

5

Building stepsGroundbreaking ceremony16th October 2012

January 2013

Power: 1 MWel (Stack) Hydrogen production: 265 m³/h Fed into the local gas grid

(Hamburg Netz GmbH) Project lifetime:3 years (11/2012–

10/2015) Project volume: 13,5 Mio. €

Key Parameters

Example: Power to Gas „Hamburg-Reitbrook“

PEM-Electrolysis

Power supply

Visitore centre

M&R

EMSR

Development PEM-Technology Field test und within E.ON

energy infrastructure Development of business

model

Goals Funding and Partners

Hydrogen tolerance of the natural gas grid

Source: DVGW-Project G1-07-10 „Energiespeicherkonzepte“ / DVGW G260

TWhH2

11%

8

Hydrogen market structure in Germany

5%

36%

48%Steam reforming

By-Product

Chloralkali-electrolysis

Coal gasification

Technology

Co-Located

90%

9%

1%

Captive

Remote

Distribution< 4%

11%

26%

59%Refining

Ammonia

ChemicalsMetals

otherApplication

Quellen: IHIS, SRI, DWV, ECON Analysis

66

15

30

45

60

0

A large part of the existing applications is feasible for the integration of renewable hydrogen

9

Willingness-to-pay and costs

€/kWh

0

0,30

0,20

0,10

0,40

0,50 Criterias for production costs Power price Investment costs Interest on capital Depreciation Tax, etc. Operating hours (power

price driven, demand driven)

Power efficiency

Customer price Biomethane (1. Gen.)

Hydrogen produced from nat. gas (average market price 2010)

Customer price CO2-neut. natural gas

NCG spotmarket price nat. gas

H2 produced from CO2-neutral nat. gas

Customer price Ethanol (1. Gen.)

H2 produced from biomethane (1. Gen.)

H2 customer price demo fuel stations

Application Opportunity costs Regulatory framework

Criterias for willingsness to pay

Pro

duct

ion

cost

s H

2

Natural

gas g

rid

Customer Interest• E.ON and an international gas wholesaler have signed an LoI to

jointly cooperate to develop the PtG plant in Falkenhagen• The system is realized to deliver renewable gas to multiple

applications via the gas grid

H2

Electrolysis

Certificate Power

Power

Industry

Mobility

Heating….Natu

ral ga

s grid

Certificate GasLess CO2 emittedLess fossile gas used

+ kWh - kWh

Directive 2009/28/EC (the "Renewable Energy Directive") targets for 2020:

• 20% overall share of renewable energy in the EU • 10% share for renewable energy in the transport sector.

Directive 98/70/EG („("the Fuel Quality Directive") targets for 2020:• 6% reduction of life cycle greenhouse gas emissions• Increase biofuel sustainability with respect to indirect land-use

change (ILUC)

11

European Directives

Amendments to Directive 2009/28/EC, Article 3, paragraph 4 (iii) : “renewable liquid and gaseous fuels of non-biological origin shall be considered to be four times their energy content”.

Pre-requisite for the contribution of PtG towards the targets is the full accountability (of renewable hydrogen)This would give PtG a chance to mature and thus to integrate large quantities of renewable fluctuating energy

Basis

Proposal made by the Comission 17.10.2012 (COM(2012) 595 final

12

Estimating the contribution of renewable hydrogen

Source: Communication to the Commission on communicating outcome of the Impact

Assessment related to requirements of Article 3(4) of Directive 2009/28/EC, http://ec.europa.eu,

SWD(2012) 262 final

Member States in the National Renewable Energy Action Plans estimated the contribution of the different forms of energy (electricity, biomethane, etc.) towards the 10% target share for renewable energy in the transport sector (Directive 2009/28/EC):

ES Conclusion: no need for action since negligible contribution But this is a Chicken-and-Egg problem: without action, no

contribution Industry is ready for a significant contribution

13

Summary

• The Falkenhagen project will demonstrate the technology to the public and identify hurdels for the implementation of power to gas

• PtG is one solution in the merit order of flexibility to integrate large quantities of fluctuating renewable power

• PtG offers renewable gas for industry, mobility, heating, and power generation

• Efficiency when using hydrogen in the industry can be >60%

• Customers show interest in renewable hydrogen

• Artificial economic burdens should be relieved

• A regulatory framework should be adapted to allow PtG to contribute to the 10% target share for renewable energy in the transport sector.

14

Innovation Energy StorageE.ON Innovation Center Energy Storage

Dr. Andreas KoppT  +49 201 94614 - 547M +49 151 14 07 42 71E-Mail: Andreas.Kopp@eon-gas-storage.com