At European level, the generation of electricity from intermittent renewable sources has increased significantly in recent years and the growth trend is expected to be even higher in the coming decades, especially in light of the increasingly pressing EU objectives for the decarbonization of the economy. Whilst, on the one hand, the high injection of non-programmable energy into the grid significantly complicates the management of the electricity system, on the other hand it opens up wide spaces and new development opportunities for technologies and processes that, if appropriately controlled, could increase the flexibility of operation of the electricity system, in particular favoring its integration with the gas system in what is known as ‘sector coupling’.

Among the technologies to be developed, power-to-gas certainly stands out for the conversion of excess electrical energy into chemical energy of a fuel, such as hydrogen or synthetic methane. The growing interest in power-to-gas technology has led, at European and global level, to the significant development of experimental applications. However, one of the main barriers to its full applicability remains the cost-effectiveness of the technology, linked to high investment costs (CAPEX). Furthermore, a fear often expressed by market operators is that, even overlooking investment costs, market conditions do not allow, in the medium and long term, operation such as to enable the coverage of operating costs (OPEX).

The aim of this study is to evaluate the economic sustainability of a pilot power-to-gas plant, with reference to the national context and the medium-long term, as well as on the basis of the scenarios of the National Energy Climate Plan (PNIEC) and assuming that the plant participates in the dispatching services markets. The analysis simulates in a future time horizon (starting from 2025) the participation of a power-to-gas plant of assigned size (5 MW) on the day-ahead market (MGP) and on the dispatching services market (MSD), evaluating for both activities the economic opportunities in terms of annual margins.

In particular, simulation of participation of the plant on MSD considers the probability of acceptance of the offers on the dispatching markets (the probability of acceptance is assessed on the basis of the historical results of the services traded on MSD). The unprofitable economic results highlight the need for significant economic support, to cover the investment (assessed through the Net Present Value tool), also with the support of feed-in premium (or feed-in tariff) mechanisms such as to support a significant number of operating hours of the plant that would otherwise almost always find itself in a situation where it is not convenient to produce.

The analysis cannot be generalized outside the context of pilot plants, which have specific purposes, otherwise it would be appropriate to further explore the analysis carried out, with the gas production valued consistently with the renewable proportion of electricity taken from the grid, and therefore of the actual system value brought by the P2G plant. ABSTRACT