  The generation of synthetic natural gas from renewable electricity enables
long-term energy storage and provides clean fuels for transportation. In this
article, we analyze fully renewable Power-to-Methane systems using a
high-resolution energy system optimization model applied to two regions within
Europe. The optimum system layout and operation depend on the availability of
natural resources, which vary between locations and years. We find that much
more wind than solar power is used, while the use of an intermediate battery
electric storage system has little effects. The resulting levelized costs of
methane vary between 0.24 and 0.30 Euro/kWh and the economic optimal
utilization rate between 63% and 78%. We further discuss how the economic
competitiveness of Power-to-Methane systems can be improved by the technical
developments and by the use of co-products, such as oxygen and curtailed
electricity. A sensitivity analysis reveals that the interest rate has the
highest influence on levelized costs, followed by the investment costs for wind
and electrolyzer stack.
