IDEAS home Printed from https://ideas.repec.org/p/cam/camdae/2557.html

Exploring the Feasibility of Low-Carbon Fuel Blends in CCGTs for Deep Decarbonization of Power Systems

Author

Listed:
  • Abuzayed, A.
  • Pollitt, M. G.
  • Liebensteiner, M.
  • Hochgreb, S.

Abstract

Retrofitting gas-fired power plants to accommodate low-carbon fuel blends offers a promising pathway to achieving deep decarbonization while leveraging the existing infrastructure and maintaining electricity supply reliability. This study presents a comprehensive techno-economic assessment of low-carbon fuel options for decarbonizing combined cycle gas turbines (CCGTs), evaluating both fuel switching and blending strategies using green hydrogen, green ammonia, and biomethane. We estimate capital investment requirements for retrofitting existing fleets and building new CCGT capacity in Germany and the UK, featuring a case study case of retrofitting a relatively new CCGT power plant (Keadby2 in the UK). Our findings reveal that retrofitting increases the levelized cost of electricity (LCOE) by about 6–13 €/MWh, with storage infrastructure representing a key cost driver. Fuel blending enhances operational flexibility but raises retrofitting costs. Biomethane emerges as the most cost-effective option due to its compatibility with existing infrastructure and negligible retrofitting needs, potentially cutting capital investments by up to €16.5 and €12 billion in Germany and the UK, respectively. However, even under the most favorable conditions, the marginal cost of electricity using low-carbon fuels exceeds 120 €/MWh, leaving natural gas more competitive at current market conditions. Strategic retrofitting decisions must be pursued selectively, considering plant age, proximity to fuel supply, and storage infrastructure. Policy frameworks ensuring simultaneous supply and infrastructure development are critical to realizing the potential of fuel blending and retrofitting strategies.

Suggested Citation

  • Abuzayed, A. & Pollitt, M. G. & Liebensteiner, M. & Hochgreb, S., 2025. "Exploring the Feasibility of Low-Carbon Fuel Blends in CCGTs for Deep Decarbonization of Power Systems," Cambridge Working Papers in Economics 2557, Faculty of Economics, University of Cambridge.
    • Handle: RePEc:cam:camdae:2557
    as

    Download full text from publisher

    File URL: https://www.econ.cam.ac.uk/sites/default/files/publication-cwpe-pdfs/cwpe2557.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Vatankhah Ghadim, Hadi & Haas, Jannik & Breyer, Christian & Gils, Hans Christian & Read, E. Grant & Xiao, Mengzhu & Peer, Rebecca, 2025. "Are we too pessimistic? Cost projections for solar photovoltaics, wind power, and batteries are over-estimating actual costs globally," Applied Energy, Elsevier, vol. 390(C).
    2. Tu, Yaojie & Zhang, Haiyang & Guiberti, Thibault F. & Avila Jimenez, Cristian D. & Liu, Hao & Roberts, William L., 2024. "Experimental and numerical study of combustion and emission characteristics of NH3/CH4/air premixed swirling flames with air-staging in a model combustor," Applied Energy, Elsevier, vol. 367(C).
    3. Liebensteiner, Mario & Wrienz, Matthias, 2020. "Do Intermittent Renewables Threaten the Electricity Supply Security?," Energy Economics, Elsevier, vol. 87(C).
    4. Vishal Ram & Surender Reddy Salkuti, 2023. "An Overview of Major Synthetic Fuels," Energies, MDPI, vol. 16(6), pages 1-35, March.
    5. David Franzmann & Heidi Heinrichs & Felix Lippkau & Thushara Addanki & Christoph Winkler & Patrick Buchenberg & Thomas Hamacher & Markus Blesl & Jochen Lin{ss}en & Detlef Stolten, 2023. "Green Hydrogen Cost-Potentials for Global Trade," Papers 2303.00314, arXiv.org, revised May 2023.
    6. Brändle, Gregor & Schönfisch, Max & Schulte, Simon, 2021. "Estimating long-term global supply costs for low-carbon hydrogen," Applied Energy, Elsevier, vol. 302(C).
    7. Egerer, Jonas & Grimm, Veronika & Niazmand, Kiana & Runge, Philipp, 2023. "The economics of global green ammonia trade – “Shipping Australian wind and sunshine to Germany”," Applied Energy, Elsevier, vol. 334(C).
    8. Guteša Božo, M. & Vigueras-Zuniga, MO. & Buffi, M. & Seljak, T. & Valera-Medina, A., 2019. "Fuel rich ammonia-hydrogen injection for humidified gas turbines," Applied Energy, Elsevier, vol. 251(C), pages 1-1.
    9. Herbes, Carsten & Rilling, Benedikt & Ringel, Marc, 2021. "Policy frameworks and voluntary markets for biomethane – How do different policies influence providers’ product strategies?," Energy Policy, Elsevier, vol. 153(C).
    10. Skabelund, Brent B. & Stechel, Ellen B. & Milcarek, Ryan J., 2023. "Thermodynamic analysis of a gas turbine utilizing ternary CH4/H2/NH3 fuel blends," Energy, Elsevier, vol. 282(C).
    11. Newbery, David, 2016. "Missing money and missing markets: Reliability, capacity auctions and interconnectors," Energy Policy, Elsevier, vol. 94(C), pages 401-410.
    12. Harris, Kylee & Grim, R. Gary & Huang, Zhe & Tao, Ling, 2021. "A comparative techno-economic analysis of renewable methanol synthesis from biomass and CO2: Opportunities and barriers to commercialization," Applied Energy, Elsevier, vol. 303(C).
    13. Genc, Talat S., 2024. "Energy Transition and the role of new natural gas turbines for power production: The case of GT11N2 M generators," Energy Economics, Elsevier, vol. 131(C).
    14. Ken Oshiro & Shinichiro Fujimori, 2024. "Limited impact of hydrogen co-firing on prolonging fossil-based power generation under low emissions scenarios," Nature Communications, Nature, vol. 15(1), pages 1-11, December.
    15. Sonja Renssen, 2020. "The hydrogen solution?," Nature Climate Change, Nature, vol. 10(9), pages 799-801, September.
    16. Nazar, Roshna & Srinivasan, Shweta L. & Kanudia, Amit & Asundi, Jai, 2021. "Implication of emission regulation on cost and tariffs of coal-based power plants in India: A system modelling approach," Energy Policy, Elsevier, vol. 148(PB).
    17. Steffen, Bjarne, 2020. "Estimating the cost of capital for renewable energy projects," Energy Economics, Elsevier, vol. 88(C).
    18. Liebensteiner, Mario & Ocker, Fabian & Abuzayed, Anas, 2025. "High electricity price despite expansion in renewables: How market trends shape Germany’s power market in the coming years," Energy Policy, Elsevier, vol. 198(C).
    19. Fasihi, Mahdi & Weiss, Robert & Savolainen, Jouni & Breyer, Christian, 2021. "Global potential of green ammonia based on hybrid PV-wind power plants," Applied Energy, Elsevier, vol. 294(C).
    20. Abuzayed, Anas & Liebensteiner, Mario & Hartmann, Niklas, 2025. "Hydrogen-ready power plants: Optimizing pathways to a decarbonized energy system in Germany," Applied Energy, Elsevier, vol. 395(C).
    21. Tom Terlouw & Lorenzo Rosa & Christian Bauer & Russell McKenna, 2024. "Future hydrogen economies imply environmental trade-offs and a supply-demand mismatch," Nature Communications, Nature, vol. 15(1), pages 1-14, December.
    22. Béres, Rebeka & Nijs, Wouter & Boldrini, Annika & van den Broek, Machteld, 2024. "Will hydrogen and synthetic fuels energize our future? Their role in Europe's climate-neutral energy system and power system dynamics," Applied Energy, Elsevier, vol. 375(C).
    23. M. Calcaterra & L. Aleluia Reis & P. Fragkos & T. Briera & H. S. Boer & F. Egli & J. Emmerling & G. Iyer & S. Mittal & F. H. J. Polzin & M. W. J. L. Sanders & T. S. Schmidt & A. Serebriakova & B. Stef, 2024. "Reducing the cost of capital to finance the energy transition in developing countries," Nature Energy, Nature, vol. 9(10), pages 1241-1251, October.
    24. Matthias A. Schnellmann & Chi-Kong Chyong & David M. Reiner & Stuart A. Scott, 2018. "Deploying gas power with CCS: The role of operational flexibility, merit order and the future energy system," Working Papers EPRG 1836, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    25. Malte Jansen & Iain Staffell & Lena Kitzing & Sylvain Quoilin & Edwin Wiggelinkhuizen & Bernard Bulder & Iegor Riepin & Felix Müsgens, 2020. "Offshore wind competitiveness in mature markets without subsidy," Nature Energy, Nature, vol. 5(8), pages 614-622, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Abuzayed, Anas & Liebensteiner, Mario & Hartmann, Niklas, 2025. "Hydrogen-ready power plants: Optimizing pathways to a decarbonized energy system in Germany," Applied Energy, Elsevier, vol. 395(C).
    2. Fabian Neumann & Johannes Hampp & Tom Brown, 2025. "Green energy and steel imports reduce Europe’s net-zero infrastructure needs," Nature Communications, Nature, vol. 16(1), pages 1-19, December.
    3. Florian Egli & Flurina Schneider & Alycia Leonard & Claire Halloran & Nicolas Salmon & Tobias Schmidt & Stephanie Hirmer, 2025. "Mapping the cost competitiveness of African green hydrogen imports to Europe," Nature Energy, Nature, vol. 10(6), pages 750-761, June.
    4. Al-Ghussain, Loiy & Lu, Zifeng & Alrbai, Mohammad & Al-Dahidi, Sameer & He, Xin & Elgowainy, Amgad & Wang, Michael, 2025. "Global techno-economic and life cycle greenhouse gas emissions assessment of solar and wind based renewable hydrogen production," Applied Energy, Elsevier, vol. 401(PA).
    5. Lucien Genge & Felix Musgens, 2025. "Green Ammonia: A Techno-Economic Supply Chain Optimization," Papers 2507.02412, arXiv.org.
    6. Abuzayed, A., 2025. "From Model Optimality to Market Reality: Do Electricity Markets Support Renewable Investments?," Cambridge Working Papers in Economics 2558, Faculty of Economics, University of Cambridge.
    7. Antweiler, Werner & Schlund, David, 2024. "The emerging international trade in hydrogen: Environmental policies, innovation, and trade dynamics," Journal of Environmental Economics and Management, Elsevier, vol. 127(C).
    8. Anas Abuzayed, 2025. "From model optimality to market reality: do electricity markets support renewable investments?," Working Papers EPRG2521, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    9. Liu, Zundi & Bin, Shiyu & Chen, Siyu & Jiang, Jianbai & Zhang, Yi & Shi, Xiaoxiang & Li, Wei & Zhang, Huangwei & Li, Yuyang, 2025. "Insights into combustion and emission characteristics of ammonia co-firing with hydrogen-rich gas for gas turbine applications," Energy, Elsevier, vol. 324(C).
    10. Männer, Wolfgang & García, Joshua Fragoso & Lux, Benjamin & Sansavini, Giovanni & Sensfuß, Frank, 2025. "CO2-compensated natural gas economically beats synthetic methane," Applied Energy, Elsevier, vol. 401(PC).
    11. Benjamin Trouve, 2026. "Low-Carbon Hydrogen Deployment Under Trade Liberalization Policies," EconomiX Working Papers 2026-1, University of Paris Nanterre, EconomiX.
    12. Ephraim Bonah Agyekum & Jeffrey Dankwa Ampah & Solomon Eghosa Uhunamure & Karabo Shale & Ifeoma Prisca Onyenegecha & Vladimir Ivanovich Velkin, 2023. "Can Africa Serve Europe with Hydrogen Energy from Its Renewables?—Assessing the Economics of Shipping Hydrogen and Hydrogen Carriers to Europe from Different Parts of the Continent," Sustainability, MDPI, vol. 15(8), pages 1-14, April.
    13. Bühler, Lauritz & Scharf, Hendrik, 2025. "Green Hydrogen in the European Union – A large-scale assessment of the supply potential and economic viability," Applied Energy, Elsevier, vol. 401(PA).
    14. Glenk, Gunther & Reichelstein, Stefan, 2021. "Intermittent versus dispatchable power sources: An integrated competitive assessment," ZEW Discussion Papers 21-065, ZEW - Leibniz Centre for European Economic Research.
    15. Galimova, Tansu & Satymov, Rasul & Keiner, Dominik & Breyer, Christian, 2024. "Sustainable energy transition of Greenland and its prospects as a potential Arctic e-fuel and e-chemical export hub for Europe and East Asia," Energy, Elsevier, vol. 286(C).
    16. Oshiro, Ken & Fujimori, Shinichiro, 2022. "Role of hydrogen-based energy carriers as an alternative option to reduce residual emissions associated with mid-century decarbonization goals," Applied Energy, Elsevier, vol. 313(C).
    17. Kai Schulze & Mile Mišić & Nikola Radojičić & Berkin Serin, 2024. "Evaluating Partners for Renewable Energy Trading: A Multidimensional Framework and Tool," Sustainability, MDPI, vol. 16(9), pages 1-22, April.
    18. Đukan, Mak & Kitzing, Lena, 2023. "A bigger bang for the buck: The impact of risk reduction on renewable energy support payments in Europe," Energy Policy, Elsevier, vol. 173(C).
    19. Li, Yunlong & Feng, Lai & Chen, Wei, 2024. "Chemical effect of H2 on NH3 combustion in an O2 environment via molecular dynamics simulations," Energy, Elsevier, vol. 308(C).
    20. Wang, Ke & Liu, Fangming & Liu, Junling, 2025. "Techno-economic assessment of different clean hydrogen development pathways across industries in China," Applied Energy, Elsevier, vol. 382(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cam:camdae:2557. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jake Dyer (email available below). General contact details of provider: https://www.econ.cam.ac.uk/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.