The Future Cost of Electricity-Based Synthetic Fuels

  • Project Duration: 02/2017 - 09/2017

A crucial factor for decarbonisation is the extent to which synthetic fuels converted from renewables can supplement the direct use of electricity by 2050.

A combination of increased efficiency and the direct use of renewable power (e.g. electric cars, heat pumps) is the most affordable way to achieve carbon neutrality in the heating and the transport sectors. However, some discussions have also considered the use of green synthetic fuels to supplement these measures. These carbon-neutral fuels are produced using renewable electricity and come in the form of hydrogen (P2G-H2), methane (P2G-CH4) as well as petrol and diesel (P2L). But energy is lost in their manufacture, lowering overall efficiency. Furthermore, the potential for expanding solar and wind energy in Germany is limited, in part because of public resistance to further expansion. In addressing these issues, Agora Verkehrswende and Agora Energiewende have contracted Frontier Economics to ascertain the costs of importing carbon-neutral synthetic fuels through 2050.

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