Integration of P2G with biomass fired CHP plant case OxyBoost WP3: System integration, value chains, business cases

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1 Integration of P2G with biomass fired CHP plant case OxyBoost WP3: System integration, value chains, business cases NEO-CARBON ENERGY 1ST RESEARCHERS SEMINAR Eemeli Tsupari, Janne Kärki, VTT

2 Potential business cases PtH 2 / PtSNG / PtX? Site Pulp mill CHP plant Ethanol plant (fermentation) Digestion plants (wastewater, biowaste) Households Natural gas production (also offshore) Petroleum industry Rural wind and solar (out of reach of grid) BtL hybrid Others (steel mill etc.)? Scale (electrolyser) xx kw 1 MW 10 MW 100 MW Technology Electrolyser HT electrolyser Catalysts? Others? Utilisation Pulp&Paper Transportation CHP production Electricity production Residential heating Petro-/chemical industry (H2) Oxyfuel Different options for O2 Location Finland Germany Brazil Algeria Norway Iceland Others? Policy/market Grid service CO 2 price Electricity price&variation Taxation Others?

3 Business case 3. CHP-plant - rationales PtSNG in a CHP-plant site: O 2 utilisation on site (see next slide) Potential to heat integration Potential for CO 2 reductions on site Existing boiler/feedwater system, electricity/grid infrastructure Decreased electricity cost due to in-house consumption (tax, grid fees) PtSNG in transportation and residential heating: RES & non-ets CO 2 reduction targets, oil replacement high value for SNG

4 Potential benefits from O 2 utilisation in CHP plant To utilise cheaper low-grade fuels (moisture, ash LHV) To maximise heat and/or power production through: Increased fuel input (if amount of flue gas is limiting) Increased boiler efficiency (flue gas losses) Enables regulating power for both directions! Requires O 2 storage Reduces costs of CO 2 capture (energy penalty, investment), if utilised

5 Subcase 3A: OxyBoost in CHP plant Existing 300 MW fuel CHP plant Cofiring peat and forest residues, BFB Given OxyBoost constant 5 average m-% of prices secondary and tertiary air (including BasedCO on 2 allowances) study&report by Pikkarainen et Created al scenario (confidential) of hourly prices Required investment for CHP plant (O 2 storage, injection, Resulting safety ) economic value for oxygen ITERATION Additional income for PtG unit Operation hours Profitability Average costs of electricity etc

6 Model Link to NeoSkynet

7 Operation of PtG and O2Boost ( Pessimistic scenario) Realized prices, Finland 2013, no operation in FCR-N market, electrolyser efficiency 54%

8 Feasibility ( Pessimistic scenario)

9 Sensitivity for investment ( Pessimistic scenario)

10 Scenario 2: 50% increase in volatility, more efficient and larger electrolysis, better heat utilisation also at summer

11 Operation of PtG and O2Boost (Scen. 2)

12 Feasibility (Scenario 2)

13 Sensitivity for investment (Scenario 2)

14 Conclusions Economic value of recoverable heat important Utilisation rate, replaced fuel, replaced CHP ( electricity price) Significant share from methanation unit possible to superheat and convert to electricity (however, this would typically happen during low electricity prices..?) Also utilisation of O 2 has important contribution on economics Is there a value for O 2 on site, or markets within reasonable transportation distances OxyBoost in CHP plant may offer a feasible market environment for PtG in near future! Operation in frequency control markets (e.g. FCR-N) may improve economics significantly

15 Conclusions Presented two factors (value of steam/heat and O 2 ) determine the most feasible applications of PtSNG in Finland (especially via utilisation rate!) SNG and electricity can be transported to markets (and SNG stored) PtH 2 is different story As well as island applications, where extremely cheap electricity can be available CO 2 seems to be less critical as it can be purchased from markets already and the magnitude of price is similar than predicted cost of capture from flue gases (and becoming even cheaper to purchase in the future)

16 Next Modelling of different applications (e.g. pulp mill) with the same model comparable indicators in different market situations Integration with other WP s - performance of electrolysis, methanation - different technologies (e.g. SOEC) - different applications - electricity price scenarios

17 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.