New research from Denmark shows that PV-to-methanol facilities can achieve 30% lower methanol-level costs by engaging in reserve markets. The researchers examined the ability of a PV-to-methanol plant to contribute to the grid in frequency control reserves (FCR), automatic frequency restoration reserves (aFRR) and manual frequency restoration reserves (mFRR).
A group of researchers led by scientists from the Technical University of Denmark (DTU) has investigated how PV-on-methanol plants can participate in reserve markets to minimize the levelized cost of methanol and found that these facilities can achieve benefits economic potential.
The academics examined, in particular, the ability of a current PV-to-methanol plant to contribute to the grid in frequency control reserves (FCR), automatic frequency restoration reserves (aFRR) and manual frequency restoration reserves (mFRR) .
To optimize the cost-effectiveness of power-based fuel generation in X (PtX), one proposal suggests using the inherent flexibility of PtX plants to provide frequency reserves in the power grid, they explained. By analyzing the hybrid renewable energy system (HRES) technology and the current reserve markets, it is found that HRES qualifies for certification of the provision of frequency reserve, including FCR, aFRR and mFRR, by the transmission system operator.
The PV-to-methanol plant that was analyzed can produce about 32,000 tons of e-methanol per year. It is powered by the grid and a 300 MW PV plant connected to proton exchange membrane (PEM) electrolyzers with a capacity of 52.5 MW. The PEM unit has a minimum load of 5%.
While existing studies mostly simulate short-term scenarios, this research extends its focus to a full year, shedding light on the dynamics of renewable energy integration and market management over an extended period, the research team stated. The comparison includes two scenarios: participating only in the day-ahead (DA) market and engaging in both the DA and reserve (RE) markets for the years 2020 and 2021.
The factory is located near the German border, in Kass, South Jutland. Through the mathematical model, solar PV energy accounts for 66% of the total energy used by the system each year. However, during the summer months, the PV capacity exceeds that of the power-to-X plant, resulting in excess PV production, which can then be used for grid export and backup market participation.
For both years, the AFRR market proves to be the main source of additional revenue, while mFRR and FCR participation contribute to a lesser extent, the team said. In 2020, the reserve market revenue reaches 4.82 million ($5.23 million), with FCR accounting for 16%, aFRR 79% and mFRR 5%.
For the DA market only, the model found a levelized cost of methanol (LCoM) of 1,508/t in 2021 and 1,276/t in 2020. For both DA and RE markets, the model shows an LCoM of 1,059/t for 2021 and 1,117 /t for 2020. According to the researchers, these results represent a 30% reduction in LCoM for 2021 and 12% for 2020.
The model efficiently allocates electrolyser capacity to maximize market returns, with the resulting LCoM values ​​closely matching International Renewable Energy Agency (IRENA) estimates, the academics concluded. This underlines the economic benefits of HRES participation in reserve markets, showing the potential for increasing the sustainability of the renewable energy system through market inclusion.
Their findings were presented in Minimizing the cost of a PV-methanol hybrid plant through participation in reserve markets: A Danish case study, published in International Journal of Hydrogen Energy. Academics from Denmark’s DTU and China University of the Chinese Academy of Sciences conducted the research.
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