Jens Perner, Associate Director at Frontier Economics, presented a study on the future costs of synthetic gas and liquid fuels at an event organized by Agora Energiewende and Agora Verkehrswende in Berlin today. The study, commissioned by Agora, examines the long-term (to 2050) costs of producing and transporting synthetic methane (power-to-gas) and liquid fuels (power-to-liquids) from regions such as North Africa, the Middle East and Iceland.
The study is important given ambitious long-term climate protection targets set by governments in Germany and other European countries. Achieving emissions reduction targets requires, among other things, a significant reduction in greenhouse gas emissions in the heating and transport sectors. Synthetic gas and liquid fuels will play an important role in this context in the medium- to long-term, including in energy storage, continued use of energy infrastructures in the future, and bringing renewable energy into new applications such as air traffic.
The study reveals that cost advantages of importing synthetic heating and fuel are possible due to more favourable local conditions for electricity generation from renewable energies. In addition, significant cost reductions are expected in the medium- to long-term, bringing synthetic and conventional fuel costs closer together.
Jens Perner said: “Importing climate-neutral synthetic gas and liquid fuel has cost advantages and can help to overcome infrastructure bottlenecks in renewable energies within Germany. The next step is to create a suitable framework for the use and trade of these energy sources.”
The cost estimates can be traced in a publicly accessible Excel tool.
Frontier regularly advises on issues of sector coupling and other topics related to energy transition.
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