The value of gas storage

Denmark | March 2020 - September 2020

The green transition creates new conditions for the economy of and demand for gas storage. On one hand, a shift away from the use of gas is happening, as it is displaced by heat pumps and district heating, electrification in the industry, and the electricity supply is based more and more on wind, pv and biomass, as well as international exchange. On the other hand, the gas network and its storage facilities represent the resource that is scarce in the future – flexibility. Gas storage continues to be a very cheap kind of energy storage.

Ea Energy Analyses described the value of gas storage with various developments in the energy system. The value is defined here as the difference in cost between two calculations for an energy system either with or without the option of (wider) use of the gas storages. The main focus was on the socioeconomic value of the gas storages.

Four scenarios were created, all with the prerequisites that the 70% target for 2030 is met and that carbon neutrality is the goal for 2050. As a starting point for the scenarios, two tracks were followed: a hydrogen track and a methane track. Each track was combined with two alternative paradigms for operation. In one track, PtX production (electricity usage) was optimised based on the spot price. In the other track, PtX production was connected directly to renewable energy production facilities, such as offshore wind farms.

The project was carried out for Energinet and ran from March to September 2020.