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The Australian Liquid Fuel Technology Assessment (ALFTA)

November 2014

Presented by

Arif SyedProgram Leader: Research and Analysis ProgramBureau of Resources and Energy Economics

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OutlineI ALFTA Overview

II Assumptions, Costs and Technologies

III ALFTA Model

IV Levelised Costs of Fuel Over Time

V Key Findings

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I. ALFTA Overview: Previous Work • International studies are not easily available on the

cost of liquid fuel technologies (for transport use).

• In 2012-13, the Department of Resources, Energy and Tourism engaged the LEK consultancy to produce cost estimates of advanced biofuel production technologies.

• The study essentially remained inconclusive in producing the levelised cost of fuel estimates (production cost of liquid fuels for transport uses).

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Aim of ALFTA

• ALFTA provides the best available and most up-to-date estimate of current and future costs (component cost and levelised costs) of 18 liquid fuel technologies for transport use.

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Approach• Component costs have been developed through a

bottom-up engineering analysis of each of the

technologies. These costs include, costs such as

domestic capital costs, international capital costs,

labour productivity, etc.

• Parameters provided for each fuel generation

technology (thermal efficiency, O&M costs, fuel

costs, capacity factors, etc.

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ALFTA Report and Model

(1)ALFTA Report: Details the technologies and methods.

(2)ALFTA Model: Available upon request: www.info@bree.gov.au

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II. Key Assumptions

• Key assumptions include: (1) economic growth of

2.5%; (2) AUD moving to 0.86 USD/AUD by 2031-

32.

• Capital costs are provided on the basis of an Nth-

of-a-kind (NOAK) plant in Australia and at a utility-

scale.

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Component Costs

• Capital Costs (local & international components)

• Operation & Maintenance (fixed and variable)

• Feedstock-input costs (provided by ACIL Allen)

• Owner’s costs

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18 Fuel technologies covered:1. Conventional petroleum fuels

2. Liquid petroleum gas

3. Compressed natural gas

4. Liquefied natural gas

5. Gas to liquids

6. Coal to liquids

7. Biomass to methanol

8. Solar dissociation

9. Conventional bioethanol

10. Advanced lignocellulose bioethanol

11. Advanced bioethanol - synthesis gas fermentation

12. Biodiesel by transesterification

13. Hydrothermal upgrade

14. HEFA/HVO

15. Algal biomass via HEFA/HVO

16. Methanol/DME/MTG

17. Fast pyrolysis

18. Alcohol to jet

 

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Levelised Cost of Fuel (LCOF)

LCOF=KC + O&M fix + O&M var + FC + SC + PC

Where, the LCOF =$/GJ

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III. ALFTA Model

• Values of more than 17 cost parameters can be

altered by users to explore the LCOF estimates’

sensitivity to the user’s input.

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ALFTA Regional Costs

F. Coal to Liquids 100.00% 105.00% 105.00% 120.00%Biomass to Methanol 100.00% 105.00% 105.00% 120.00%Regional Capital Cost Modifiers

   East Coast

MetropolitanEast Coast Regional

West Coast Metropolitan

West Coast Regional

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LCOF breakdown in cost components

Select Technology:M. Advanced Bioethanol - Synthesis Gas Fermentation

Select Region:East Coast Regional

LCOF Component ($/GJ) 2013 2020 2025 2030 2040 2050

Capital Cost #N/A 25 23 21 18 16

Fixed O&M #N/A 5 5 5 6 6

Variable O&M #N/A 8 8 9 10 11

Feedstock Costs #N/A 13 13 13 13 13

Cost of Emissions #N/A 0 0 0 0 0

TOTAL LCOF #N/A 52 50 48 47 46

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IV. LCOF over time

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LCOF comparisons 2013, real 2012-13 A$/GJ

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LCOF 2020, real 2012-13 A$/GJ

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LCOF 2050, real 2012-13 A$/GJ

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V. Key Findings

• There are several currently available technologies

from which fuel production is already competitive

with conventional petroleum fuels, i.e. have a lower

LCOF.

• By 2020, multiple emerging technologies are

expected to be available at a lower LCOF than

petroleum fuels.

-- eg. Coal to Liquids (CTL) and Gas to Liquids (GTL).

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Key Findings cont.

• Advanced bioethanol fuel technologies become

cost competitive in 2020, and remain cost

competitive out to 2050.

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Thank you

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Thanks

arif.syed@industry.gov.au