Impact of Natural Gas Price Variations and Consumption Limitation on the Decarbonization of Sector-Coupled Energy Systems

Abstract

This paper assesses the effects of fossil natural gas (NG) price variations and NG consumption restrictions on the development and decarbonization of future cross-sector and cross-vector coupled energy systems. For this purpose, a capacity expansion planning model built upon the linear programming mathematical optimization is developed, optimizing operation and investment in technologies for generation, storage, conversion and final consumption of electricity, hydrogen (H2), and NG, while carbon dioxide (CO2) sector encompassing carbon capture, storage and utilization is incorporated in the model. A base case scenario adopting REPowerEU expectations about NG price levels by 2050 is analyzed, with the Greek sector-coupled energy system selected as a case study, aiming to demonstrate that anticipated NG price is inadequate to stimulate full decarbonization of the integrated energy system and even moderately reduce dependence on NG. Thus, increased fossil NG prices and consumption restrictions are assessed regarding their potential contribution towards incentivizing energy system complete decarbonization. Decarbonization is achieved both with a NG price of 120 €/MWh and with elimination of fossil NG consumption, at a similar cost, yet with a different energy system development. In both cases, a cumulative renewable energy sources (RES) capacity of 106 GWe accompanied by substantial long-duration storage is required. Interestingly, as decarbonization levels increase, onshore wind farms prevail over PVs in the generation mix. Residential heating-cooling and transport needs are predominantly electrified, while industrial heating is exclusively supplied by H2.

Keywords

• Capacity expansion planning
• energy system decarbonization
• fossil natural gas price
• fossil natural gas consumption
• renewable energy
• sector-coupling