Techno-Economic Assessment of Biological Methanation with Green Hydrogen: Model Application and Scenario Analysis in Italian Wastewater Treatment Plants

The increasing concern about global warming has increased the focus on the impact of greenhouse gases, which are the leading cause of the current climate crisis; therefore, the goal of achieving climate neutrality by 2050 must be pursued. In this context, biological biogas upgrading presents a promising solution for producing methane in Wastewater Treatment Plants (WWTPs). It enables these energy-intensive facilities to become mitigation centres, utilising CO₂ and promoting circular economy principles. This study aims to evaluate the technical and economic feasibility of integrating green hydrogen production into the biological upgrading process for large WWTPs. A parametric model combining mass and energy balances, reactor and auxiliary equipment sizing together with an analysis of investment, operating costs and revenues for each unit was developed to perform both techno-economic assessment and scenario analysis. The work includes a critical review of the energy market along with issues related to H2 in the Italian context. Five scenarios were simulated: i) current incentive; ii) alternative incentive; iii) electricity procurement, comparing the National Unique Price with Power Purchase Agreement; iv) cost reduction by 2030; v) purchase of green H2; then the financial ratios were calculated. Results indicate that the current incentive scheme is less profitable compared with to other scenarios; purchasing green hydrogen makes the scenario unprofitable. A sensitivity analysis was conducted on the most critical parameters (cost of electricity, CAPEX of electrolyser and price of H2) to assess their influence and identify unprofitability thresholds. The study demonstrates that techno-economic viability is significantly affected by regulatory regimes and market conditions. The quantitative framework provided by this work helps to clarify under which economic conditions WWTP-based biological methanation can scale and support European decarbonisation targets.