Dr. Gunther Glenk, Assistant Professor at the Mannheim Institute for Sustainable Energy Studies, receives the Walther-Rathenau award for the best paper of a young scholar at this year’s annual meeting of the German Economic Association of Business Administration (GEABA). In the awarded paper, Dr. Glenk examines both conceptually and empirically the competitiveness of reversible Power-to-Gas technology. This technology can potentially replace hydrogen and electricity production that is today based on fossil fuels and, therefore, substantially reduce carbon dioxide emissions.
The paper “contributes to both economic theory and the solution of an empirical problem of existential importance to our society”, said Prof. Dr. Anna Rohlfing-Bastian, leader of the GEABA association. “In addition, the paper shows how a joint approach of theoretical and empirical analyses can yield insights that enable society to move forward more quickly”, she continued. “This is”, as she concluded, “research at its best.”
Information on how low-carbon production technology competes economically against incumbents based on fossil fuels becomes increasingly important in the transition towards a decarbonized economy. The measurement of competitiveness, however, has remained fuzzy due to ambiguity in the calibration of unit cost. Dr. Glenk’s paper shows that the concept of levelized cost can yield the relevant unit cost in such situations. “Crucial to the calculation”, he says, “is the appropriate allocation of upfront capacity investment expenditures both intertemporally among periods of operation and cross-sectionally among the products.”
The paper applies the economic framework to new Power-to-Gas technology, which can reversibly produce electricity and hydrogen. In the context of Germany and Texas, the empirical evaluation finds that the levelized cost of both outputs can indeed be low enough to compete economically with alternative production pathways based on coal or natural gas. The fact that the findings are more promising than previous studies suggest stems from “the need for the appropriate accounting of joint cost”, says Dr. Glenk.
The German Economic Association of Business Administration e. V. (GEABA) was founded in 2000 as a non-profit organization in Koblenz, Germany. Within the annual GEABA meeting, researchers present their latest research contributions to business economics. This year´s conference took place from September 19–20 at the WHU, Otto Beisheim School of Management, under the topic: “The role of microeconomic methods in management”. More information on the annual conference can be found here.