Economic analysis of a Power-to-Gas pilot plant within the Italian energy transition framework

Abstract

This work aims at evaluating the economic sustainability of a power-to-gas pilot plant, with reference to the Italian context and to the medium-long term. The study is based on the energy scenarios of the Italian National Climate and Energy Plan (NECP) and assumes that the plant participates in the ancillary services markets. The study assesses the economic barriers and the main factors affecting the competitiveness of power-to-gas. The results show that, while power-to-gas being a technically feasible solution to support the flexibility of the power system, the economics of the pilot plant are heavily affected by the cost of components and operating cost. The results also highlight the need for suitable policies and financial support aiming at enhancing favourable operating conditions for pilot applications of the technology.