This presentation examines the economics of producing synthetic fuels from carbon dioxide (CO2) and water with renewable electricity based on current Finnish and German electricity price data.
Danfoss NeoCharge Technology -A Revolution in 2024.pdf
Prospective economics of standalone electrofuels
1. Prospective economics for stand-alone
production of electrolytic hydrogen and
hydrocarbons
NeoCarbon Researchers’ seminar
Ilkka Hannula, Dec 2014
VTT Technical Research Centre of Finland
20. 2005/01/2015 20
Variable costs of electrolytic H2 production
(based on cheapest possible hours in Finland)
Based on following assumptions:
• Finnish elspot 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
21. 2105/01/2015 21
Variable + fixed costs of electrolytic H2 production
(based on cheapest possible hours in Finland)
Based on following assumptions:
• Finnish elspot 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
22. 2205/01/2015 22
Levelised cost of H2
(based on cheapest possible hours in Finland)
Based on following assumptions:
• Finnish elspot 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
23. 2305/01/2015 23
Levelised cost of H2
(based on cheapest possible hours in Finland)
Based on following assumptions:
• Finnish elspot 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
3.3 €/kg
24. 2405/01/2015 24
Integration to transportation in Finland
Electrolyser
Electricity H2
Synthesis
Fuel for transp.
CO2
= 54 % (LHV) = 83 % (LHV)
Based on following assumptions:
• Finnish elspot 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment.
• Fuel synthesis having 83 % cold
gas efficiency and 420 €/kW specific
investment.
• Revenue from byproduct oxygen
used to cover CO2 feedstock cost.
128 €/MWh
31. 05/01/2015 31
Levelised cost of H2
(based on cheapest possible hours in GER2013)
Based on following assumptions:
• German electricity 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
32. 05/01/2015 32
Levelised cost of H2
(based on cheapest possible hours in GER2013)
Based on following assumptions:
• German electricity 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
33. 05/01/2015 33
Levelised cost of H2
(based on cheapest possible hours in GER2013)
Based on following assumptions:
• German electricity 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment
• Byproduct oxygen vented
2.8 €/kg
34. 05/01/2015 34
Integration to transportation in GER2013
Electrolyser
Electricity H2
Synthesis
Fuel for transp.
CO2
= 54 % (LHV) = 83 % (LHV)
Based on following assumptions:
• German electricity 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment.
• Fuel synthesis having 83 % cold
gas efficiency and 420 €/kW specific
investment.
• Revenue from byproduct oxygen
used to cover CO2 feedstock cost.
110 €/MWh
35. 05/01/2015 35
Audi e-gas plant visit
• Location: Werlte, GER
• Alkaline electrolysis (AEC):
• size: 6 MW
• net efficiency: 54 % (LHV)
• Annual operating hours: 4000 h
• Lev. cost of H2 (LCOH2): 250 €/MWh
• EEG Umlage for feedstock electricity
• 63 €/MWh
• contribution to LCOH2: 63/0.54
= 117 €/MWh
• LCOH2 w/o EEG: 133 €/MWh
36. 05/01/2015 36
Integration to transportation in GER2013
Electrolyser
Electricity H2
Synthesis
Fuel for transp.
CO2
= 54 % (LHV) = 83 % (LHV)
Based on following assumptions:
• German electricity 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment.
• Fuel synthesis having 83 % cold
gas efficiency and 420 €/kW specific
investment.
• Revenue from byproduct oxygen
used to cover CO2 feedstock cost.
38. Breakdown of capital cost for 250-kW SOFC system (Fontell et al., 2004,
Conceptual study of a 250 kW planar SOFC system for CHP application)
Effect of production volume on estimated direct manufactured
cost ($/kW) for stacks with planar rectangular cells.
(DOE report: Conceptual study of a 250 kW planar
SOFC system for CHP application, 2007)
Estimated future cost of SOEC system:
200 / 0.31 * 2 = 1290 $/kW ~ 1000 €/kW
“It is expected
however, that the SOEC
stack (1/3 the cost)
needs to be replaced
every 5 years, whereas
most of the system
components (2/3 the
cost) will last for most
of the 20 years.“
(DTI report:
GreenSynFuels, 2011)
40. 05/01/2015 40
Comparison of synfuel production costs
$145/bbl
$217/bbl
$254/bbl*
*Based on 1.578 MWh/bbl,
1 € = 1.33 $, 14.2 $/bbl refining margin
41. 05/01/2015 41
When to switch from AEC to SOEC?
Specific inv. cost lower than
this makes SOEC more
economic than AEC
Based on following assumptions:
• German electricity 2013 pricing
• Alkaline electrolysers having
54 % net efficiency (LHV) and
750 €/kW specific investment.
• Solid oxide electrolysers having
• 90 % net efficiency
• Revenue from byproduct oxygen
used to cover CO2 feedstock cost.
42. 05/01/2015 42
In 2013 the annual global production of photovoltaics (PV)
was 38 gigawatts and the cumulative global production
was 140 GW.
Installed PV power has grown exponentially
at a rate of 43 percent each year since 1996,
(almost doubling every two years).
It is the world’s fastest-growing energy source.
Data: BP Statistical Review of World Energy 2014
World cumulative installed photovoltaic (PV) power
43 % average annual
growth
48. Take home messages
• Negative electricity pricing currently arriving to Finland
• In FIN energy markets (2013) lowest production cost achieved by
continuous operation
• Negative electricity prices in German about 50 h per year
• In GER energy markets (ca 2013) lowest production costs achieved
between 4000 to 8000 cheapest hours per year
• With an estimated future cost of SOEC system ~1000 €/kW:
• Minimum H2 production cost: 1.9 €/kg
• Minimum synfuels production cost: $145/bbl
• Electrolytic synfuels cheaper than gasoline ($100/bbl) when avg.
annual electricity cost 16 €/MWh (SOEC @ 1000 €/kW)
• SOEC based systems become more economic than AEC after
prices drop below 2500 €/kW
• Estimated time for annual production volume of SOEC systems to
reach 100 MW/a likely to take more than 13 years
49. NEO-CARBON ENERGY project is one of the Tekes’ strategic research openings.
The project is carried out in cooperation between VTT, Lappeenranta University of Technology and University of
Turku / Futures Research Centre.