Optimal Pathways for E-Fuel Production from Renewable Sources: A Techno-Economic Comparison of Green Hydrogen and Synthetic Methane

The present work proposes a holistic techno-economic framework for the production of green hydrogen and synthetic methane from a dedicated 18.8 MW renewable park (13.8 MW wind and 5 MW photovoltaic) in southern Italy. A Mixed-Integer Linear Programme optimises the hourly dispatch of the electrolyser, the battery, and the bi-directional grid connection over a full-year horizon (8760 h) while meeting an annual target of 600,000 kgH2. Two downstream pathways are compared: compressed-hydrogen transport by tube trailer at 200, 400, and 600 km, and on-site catalytic methanation via the Sabatier reaction. The assessment is deliberately restricted to the cost side, so that the two carriers are compared on a robust, price-agnostic levelised cost basis. Operated in an import-free mode to guarantee hydrogen with zero operational carbon emissions, the optimisation co-determines a cost-optimal battery capacity of 18 MWh. The levelised cost of hydrogen (LCOH) ranges between 9.55 and 10.27 €/kgH2 at the gate, rising to 11.17–12.33 €/kgH2 with transport, whereas the levelised cost of synthetic methane is 5.67 €/kgCH4. On an energy basis, hydrogen is more competitive (0.335–0.370 €/kWh) compared to methane (0.409 €/kWh). A structured sensitivity analysis shows that a grid connection of 10 MW or more renders the battery unnecessary and lowers the gate LCOH to 8.26 €/kg, and ranks the renewable CAPEX and the discount rate as the dominant cost drivers. The produced hydrogen is essentially carbon-free at the gate, with the only residual emissions (0.014–0.041 kgCO2/kWh) arising from its diesel trucking.