True cost electricity tariffs for PtX as a consumer category

Student thesis: Master Thesis and HD Thesis

  • Anders Rosenkjær Andersen
4. term, Sustaianable Cities, Master (Master Programme)
This project investigates electrofuels as a decarbonization tool in the hard to abate sectors and how tariffs in the transmission grid affect the economy of an ammonia production facility. The need for a reforming of the tariff structure surrounding electrofuels is present due to the current structures failure to comply with both danish and EU regulation and the unfairness of PtX facility having to pay more than what they give rise to. The analysis in this project finds a suggested new tariff rate of 2,8 øre/kWh, that is found to better reflect what a PtX facility give rise to under the assumption that they are placed in a landing zone. LCOE calculations of the planned ammonia production facility in Esbjerg show that the ammonia price is highly sensitive to tariffs, and that the abatement cost can be reduced from 319 EUR/ton of CO2 to 255 EUR/ton with the new suggested tariff rate that better reflect the true cost of what a facility will give rise to. By use of the choice awareness theory, choice eliminating mechanisms are found as to why there is currently only one new product that offers a reduced tariff on the transmission grid in review at Forsyningstilsynet. This new product called “limited access” is found to not reflect what a PtX facility will give rise to as it only offers a reduced transmission tariff, and not a reduced system tariff. In the analysis it is shown that this is unfair, as a PtX facility can offer services to the transmission grid that justify a reduction of the system tariff.
Publication date4 Jun 2021
Number of pages64
ID: 413698951