Prospective economics of standalone electrofuels
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Transcript of Prospective economics of standalone electrofuels
Prospective economics for stand-aloneproduction of electrolytic hydrogen and
hydrocarbons
NeoCarbon Researchers’ seminarIlkka Hannula, Dec 2014
VTT Technical Research Centre of Finland
- Economic framework & methodology- Electrolyser economics under Finnish electricity market conditions
- Hydrogen- Electricity- Synfuels
- Electrolyser economics under German electricity market conditions- Hydrogen- Electricity- Synfuels
- AEC --> SOEC- Costs- Boundary conditions- Comparison- Time frames for deployment
- Summary
Content
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Price
Operating expense
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Price
Operating expense
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Operating expense
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”BAU economics”
Operating expense
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Price
Negative electricity priceleads to negative OPEX
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Price
Negative electricity priceleads to negative OPEX
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Price
Negative electricity priceleads to negative OPEX
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Price
Negative electricity priceleads to negative OPEX
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Price
Negative electricity priceleads to negative OPEX
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Price
Possible future OPEX curve?
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Price
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Price
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Price
Neo-Carboneconomics?
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Finland 2013
1805/01/2015 18
Hourly Elspot prices in 2013 (Finland’s area price)
1905/01/2015 19
Average electricity price in Finland for selected amountof cheapest hours in 2013
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) and750 €/kW specific investment
• Byproduct oxygen vented
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) and750 €/kW specific investment
• Byproduct oxygen vented
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) and750 €/kW specific investment
• Byproduct oxygen vented
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) and750 €/kW specific investment
• Byproduct oxygen vented
3.3 €/kg
2405/01/2015 24
Integration to transportation in Finland
ElectrolyserElectricity 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) and750 €/kW specific investment.
• Fuel synthesis having 83 % coldgas efficiency and 420 €/kW specificinvestment.
• Revenue from byproduct oxygenused to cover CO2 feedstock cost.
128 €/MWh
Germany 2013
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Hourly electricity price in Germany in circa 2013
05/01/2015 27
Finnish and German Price Duration Curves in circa 2013
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Finnish and German Reverse Price Duration Curvesin circa 2013
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Zooming on the cheapest hours of the year
05/01/2015 30
Average electricity price for selected amount ofcheapest hours in 2013
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) and750 €/kW specific investment
• Byproduct oxygen vented
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) and750 €/kW specific investment
• Byproduct oxygen vented
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) and750 €/kW specific investment
• Byproduct oxygen vented
2.8 €/kg
05/01/2015 34
Integration to transportation in GER2013
ElectrolyserElectricity 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) and750 €/kW specific investment.
• Fuel synthesis having 83 % coldgas efficiency and 420 €/kW specificinvestment.
• Revenue from byproduct oxygenused to cover CO2 feedstock cost.
110 €/MWh
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
05/01/2015 36
Integration to transportation in GER2013
ElectrolyserElectricity 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) and750 €/kW specific investment.
• Fuel synthesis having 83 % coldgas efficiency and 420 €/kW specificinvestment.
• Revenue from byproduct oxygenused to cover CO2 feedstock cost.
Impact of electrolyser development potential
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 manufacturedcost ($/kW) for stacks with planar rectangular cells.(DOE report: Conceptual study of a 250 kW planarSOFC system for CHP application, 2007)
Estimated future cost of SOEC system:200 / 0.31 * 2 = 1290 $/kW ~ 1000 €/kW
“It is expectedhowever, that the SOECstack (1/3 the cost)needs to be replacedevery 5 years, whereasmost of the systemcomponents (2/3 thecost) will last for mostof the 20 years.“(DTI report:GreenSynFuels, 2011)
05/01/2015 39
Comparison of hydrogen production costs
3.3 €/kg2.8 €/kg
1.9 €/kg
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
05/01/2015 41
When to switch from AEC to SOEC?
Specific inv. cost lower thanthis makes SOEC moreeconomic than AEC
Based on following assumptions:• German electricity 2013 pricing• Alkaline electrolysers having
54 % net efficiency (LHV) and750 €/kW specific investment.
• Solid oxide electrolysers having• 90 % net efficiency• Revenue from byproduct oxygen
used to cover CO2 feedstock cost.
05/01/2015 42
In 2013 the annual global production of photovoltaics (PV)was 38 gigawatts and the cumulative global productionwas 140 GW.
Installed PV power has grown exponentiallyat 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 annualgrowth
05/01/2015 43
Possible trajectories for installed SOEC capacitybased on different levels of exponential annual increase
05/01/2015 44
Possible trajectories for installed SOEC capacitybased on different levels of exponential annual increase
Price
Required shape of thiscurve?
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Gasoline @ $100/bbl
Break-even OPEX curve
05/01/2015 47
Average electricity price needed to produceelectrolytic synfuels at $100/bbl (SOEC @ 1000 €/kW)
-380 €/MWh
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 achievedbetween 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 afterprices drop below 2500 €/kW
• Estimated time for annual production volume of SOEC systems toreach 100 MW/a likely to take more than 13 years
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.