Illustrative levelised cost of heating for hybrid systems in Germany, 2024

Sources

EUROSTAT for industrial natural gas price, electricity network costs, and taxes and levies on electricity (assumed consumption bands are I4 and IE, respectively). ENTSO-e for hourly wholesale electricity prices.

Notes

Capital cost includes equipment and installation costs. OPEX includes fixed operation and maintenance expenses and the CO2 cost. End-user industrial natural gas price excluding Value Added Tax (VAT), which is recoverable, is EUR 60/MWh. Wholesale hourly electricity prices are in the range EUR -136 to 916/MWh, to which we add a multiplicative markup of around 65% representing the combined effect of network costs, taxes and levies (excluding VAT) and incentives for flexibility. The CO2 price is EUR 80/t. Systems are sized based on LCOH minimisation: in the electric boiler + TES configuration the storage is 48 MWh and the charging power 3 MW, whereas in the electric boiler + TES + natural gas boiler the capacity is 24 MWh and the power 3 MW. For configurations involving heat pumps, hybridisation is not found to improve LCOH. Natural gas boilers are assumed to be already in place and able to continue operating, which reflects common industrial setups and avoids the need for redundant capital investment in hybrid systems. The utilisation rate of the natural gas boiler is optimised to the minimum LCOH to 80% (electric boiler + natural gas boiler) and 59% (electric boiler + TES + natural gas boiler). Thermal energy storage assumes a water tank system. Grid connection costs are excluded from the analysis due to uncertainty.