Non-individual transport – Paving the way for renewable Power-to-Gas (RE-P2G)
Should power-to-gas technology be pursued as an option for decarbonising the non-individual transport sector and if so, how can policy makers economically promote its development?
The answer is yes – but in order to be environmentally sound, power-to-gas must be based on fully, or close to fully, renewable electricity. This is particularly true for power-to-SNG, which is at a disadvantage when compared to the hydrogen path from a CO2 footprint point of view.
Detailed modelling of various options reveals that compared to other non-individual transport options, captive fleets of long range light duty vehicles are the most promising market segment for early adoption of power-to-gas technology, due to lower total cost of ownership (TCO) difference to diesel, potential for high volumes being reached faster and synergies with fuel cell electric vehicles (FCEVs) for individual uses.
Whatever the market segment, renewable power-to-gas mobility will hardly compete with fossil options or with the cheapest renewable options (i.e. battery electric vehicles (BEVs) and biomethane) without significant policy support. Therefore, setting an ambitious and binding regulation in favour of renewable mobility is a prerequisite to the development of renewable power-to-gas in the transport sector. The regulation on renewable fuels in transport should at least include higher requirements in terms of share of renewable fuels at the distribution infrastructure level.
In parallel, an exemption of taxes on electricity consumed and on fuel produced should be granted to power-to-gas plants running on renewable electricity. Subsidies for hydrogen distribution infrastructure, Green Public Procurement and direct financial support to private fleet operators are other recommended policy measures for P2G deployment at larger scale.