Prospective economics for stand-alone production of electrolytic hydrogen and hydrocarbons

Transcription

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

2 Content - 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

3 Price Operating expense h/a

4 Price Operating expense h/a

5 Price Operating expense h/a

6 Price BAU economics Operating expense h/a

7 Price h/a Negative electricity price leads to negative OPEX

8 Price h/a Negative electricity price leads to negative OPEX

9 Price h/a Negative electricity price leads to negative OPEX

10 Price h/a Negative electricity price leads to negative OPEX

11 Price h/a Negative electricity price leads to negative OPEX

12 Price h/a Possible future OPEX curve?

13 Price h/a

14 Price h/a

15 Price h/a

16 Price Neo-Carbon economics? h/a

17 Finland 2013

18 Hourly Elspot prices in 2013 (Finland s area price) 10/02/

19 Average electricity price in Finland for selected amount of cheapest hours in /02/

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 10/02/

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 10/02/

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 10/02/

23 Levelised cost of H2 (based on cheapest possible hours in Finland) 3.3 /kg Based on following assumptions: Finnish elspot 2013 pricing Alkaline electrolysers having 54 % net efficiency (LHV) and 750 /kw specific investment Byproduct oxygen vented 10/02/

24 Integration to transportation in Finland CO2 Electricity Electrolyser H2 Synthesis Fuel for transp. = 54 % (LHV) = 83 % (LHV) 128 /MWh 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. 10/02/

25 Germany 2013

26 Hourly electricity price in Germany in circa /02/

27 Finnish and German Price Duration Curves in circa /02/

28 Finnish and German Reverse Price Duration Curves in circa /02/

29 Zooming on the cheapest hours of the year 10/02/

30 Average electricity price for selected amount of cheapest hours in /02/

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 10/02/

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 10/02/

33 Levelised cost of H2 (based on cheapest possible hours in GER2013) 2.8 /kg Based on following assumptions: German electricity 2013 pricing Alkaline electrolysers having 54 % net efficiency (LHV) and 750 /kw specific investment Byproduct oxygen vented 10/02/

34 Integration to transportation in GER2013 Electricity Electrolyser H2 CO2 Synthesis Fuel for transp. = 54 % (LHV) = 83 % (LHV) 110 /MWh 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. 10/02/

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 10/02/

36 Integration to transportation in GER2013 Electricity Electrolyser H2 CO2 Synthesis Fuel for transp. = 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. 10/02/

37 Impact of electrolyser development potential

38 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) 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 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)

39 Comparison of hydrogen production costs 3.3 /kg 2.8 /kg 1.9 /kg 10/02/

40 Comparison of synfuel production costs $254/bbl* $217/bbl $145/bbl *Based on MWh/bbl, 1 = 1.33 $, 14.2 $/bbl refining margin 10/02/

41 When to switch from AEC to SOEC? 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. Specific inv. cost lower than this makes SOEC more economic than AEC 10/02/

42 World cumulative installed photovoltaic (PV) power 43 % average annual growth 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 /02/

43 Possible trajectories for installed SOEC capacity based on different levels of exponential annual increase 10/02/

44 Possible trajectories for installed SOEC capacity based on different levels of exponential annual increase 10/02/

45 Price h/a Required shape of this curve?

46 $100/bbl Break-even OPEX curve

47 Average electricity price needed to produce electrolytic synfuels at $100/bbl 1000 /kw) -380 /MWh 10/02/

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 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.