Coupling of power, fuels, chemicals: perspective for e-fuels production

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1 Coupling of power, fuels, chemicals: perspective for e-fuels production HANNOVER MESSE - Life needs Power April 25 th, 2018 Dr. Ireneusz Pyc, Dr. Gerhard Zimmermann Siemens Power and Gas, Technology and Innovation Unrestricted siemens.com

2 Sector coupling is a key lever for energy system transformation Sector Coupling Links and Interactions Sector Coupling Heat Supply Power-to-Heat (Heat pumps, CHP) Heat Storage Power Sector Gas Power Plants Power-to- Liquids Fuel Storage Power-to- Chemicals Power Storage (central) E-Mobility Transport Sector Power Storage (decentral) Hydrogen, Methane, Ammonia as feedstock for chemical processes Definition Link between power sector and energy-consuming sectors Value Proposition Improvement of energy efficiency Contribution to decarbonization of the energy sector Supports supply / load balancing (>high share of intermittent renewable generation) More diverse and interdependent energy supply Gas Boiler Gas Storage, Pipeline System Power-to-Gas (Energy Storage) Gas Industry Power-to-Gas (Re-Electrification) Gas Reforming Chemicals Drivers Reduction of green house gas emissions Reduction of energy import dependency Technology development (e.g. e-mobility, battery, electrolysis) Source: Based on FENES (OTH Regensburg) Page 2

3 Cross-over Sector coupling and transformation roadmap Efficiency gains and decarbonization of energy consumption Transportation and heating with highest need for action Preconditions for system transformation Total final energy consumption (TWh) 2, Conventional fossil fuels PV 2010 Power to heat Wind-onshore Conventional fossil fuels 2015 Small heat pumps Power to heat Thermal storage Stationary Electric storage 2020 Penetration of renewables in final energy use Share (%) Industry heat pumps E-fuels: PtG: H 2, CH 4 PtL: CH3OH Wind-offshore PV Mobility EV, hybrid E-fuels: PtG: H 2, CH District heating and cooling E-fuels to heat & power PtL: CH 3 OH, OME, MtG % Electricity (high, sustainable and growth of wind, PV, biomass) Heat (low progress) Mobility, Transportation (decrease despite ambitious targets) Efficiency improvement Heat Electricity Transportation Increase in renewable energy generation High wind, PV, biomass-shares Efficiency improvement Shift to electrical processes De-carbonization of Mobility sector Electromobility and use of e-h 2 and H 2 based e-fuels Heat sector Power-to-Heat and use and H 2 based e-fuels RES: Renewable Energy Sources, EV: Electric Vehicles, MtG: Methanol To Gasoline, OME: Oxymethylenether, Page 3

4 Carbon-based Power-to-Gas/Liquids concepts are key enablers for sector coupling Resources Conversion Applications CO 2 CO 2 Storage Synthesis e-fuels H 2 O Transportation Wind H 2 O Electrolyzer O 2 H 2 CH 4 H 2 Storage CH 3 OH F-T - products Heat Supply Solar fluctuating generation Power Storage Power Generation Industry Processes/ Chemicals Other RE (Hydro, Biomass) Conv. Power (Gas, Nuclear) dispatchable generation Power Grid Heat Supply Gas Power Plant (CHP) Natural gas infrastructure Liquids infrastructure Re-Electrification Page 4

5 e-h 2 /e-fuels are imperative to meet decarbonization targets, especially for long distance marine, aviation and road transportation Significant increase of e-fuels application until 2050 expected Reasoning and prospects for use of e-fuels German energy consumption in transport sector (Mtoe) e-h 2 /H 2 -based, CO 2 -free/co 2 -neutral fuels Liquid e-fuels: High PV- and wind potential for dedicated production Efficiency of e-mobility about factor 3-4 higher than conventional internal combustion engines efficiency gains - sectoral - e-mobility High energy density of liquid e-fuels, existing logistics and infrastructure applicable Lower production and CO 2 avoidance cost vs. bio fuels Electricity e-fuels Conventional fuels 2050 But Enabling factor for long distance transportation (road, marine, aviation) (Transparent) regulations and economic boundary conditions not yet in place Page 5

6 Production cost ( /MWh) Business cases for e-h2-/e-fuels in mobility well promising given competitiveness against biofuels Pre-feasibility studies for e-methanol Good weather conditions Carbon capture Optimized plant operation Shipment to consumer site Atacama (PV) Persian Gulf, (PV and wind) CO 2 Expected e-methanol production cost /MWh) Patagonia (wind) CO 2 capture Today to mid-term: from industrial sources Long-term: from the air Liquid e-fuel (methanol) Economic viability E-fuel production cost clearly above market value of fossil fuels, Production cost decrease due to decreasing CAPEX of renewables and electrolysis E-fuel with ~ 90% lower carbon footprint compared to fossil fuels E-fuel has the potential to outperform biofuels in terms of - production costs - CO 2 avoidance cost - food / fuel debate Market value ( /MWh) Methanol Gasoline Natural Gas Bio-ethanol 1Gen 2Gen e-fuel (future) CO 2 emissions (gco 2 -eq/mj) CO 2 avoidance costs ( /t CO2 ) Gasoline, fossil Bio-ethanol, 1Gen Bio-ethanol, 2Gen e-fuel (future) Bio-ethanol 1Gen Bio-ethanol 2Gen e-fuel (future) Page 6

7 Dedicated production of green e-fuels abroad provides a significant cost advantage compared to Germany /MWh th e-hydrogen e-methanol e-methane Germany Electricity (wind, mix onshore, offshore) ~ 320 ~ 300 ~ 240 ~ 500 ~ 300 ~ 240 Production of green e-h 2 and e-h 2 -products at best sides abroad provides a cost advantage of app. 50% compared to production in Germany ~ 160 Imports from best sides abroad 1) electricity (wind, PV) ~ 150 ~ 70 ~ 100 ~ Benchmark Prices (EU) ) SMR H 2 3) ~ bio-ethanol black methanol bio-gas/methane natural gas ) Sunbelt of the earth, w/o transportation & distribution costs to the EU 2) Prices for delivery to Europe, Methanex European Posted Contract Price (MEPCP) 3) Steam methane reforming SMR H 2 costs, based on natural gas price /MWh, no capital costs Page 7

8 Siemens started an engagement in e-fuels BMWi-funded R&D project "E2Fuels" (small-scale demonstration) Project Structure and Partners Process Concept SW Haßfurt Infrastructure site preparation Test plant in Haßfurt Balance of plant and Instrumentation & Control for the entire plant MAN Deggendorf Reactor, design, erection, testing CO 2 FAU Erlangen Scientific support for innovative CO 2 based methanol synthesis 3 H 2 + CO 2 CH 3 OH (+ H 2 O) SW Haßfurt TU München project coordination, system analyses, H 2 CH 3 OH green e- methanol Funding, project coordination Silyzer 200 Compressor Methanol-synthesis E2Fuels: Erneuerbare Emissionsarme Kraftstoffe - Forschung zur Herstellung und Nutzung in einem sektorgekoppelten Ansatz BWMi: Federal ministry for Economic Affairs and Energy (funding), PtJ: Projektträger Jülich (executing organization) Page 8

9 One of key enablers for e-fuels: Siemens PEM electrolysis SILYZER portfolio scales up by factor 10 every 4 5 years Water Electrolysis: SILYZER portfolio roadmap Reduction of specific price ( /kw) >2030 SILYZER kw Lab-scale SILYZER MW class Current commercial product SILYZER 300 >10 MW class Sales release Next generation SILYZER >100 MW Under development >1,000 MW First investigations in cooperation with chemical industry Schematic for a triple digit MW electrolysis Page 9

10 Summary 1 Sector coupling is a key lever for energy system transformation Transportation and heating sector have highest need for action e-h 2 / e-fuels are imperative to meet decarbonization targets, esp. for long distance road transportation, marine and aviation Business cases for e-h 2 -/e-fuels in mobility well promising given competitiveness against biofuels Comparative economics of green e-methanol are strongly related to electricity costs for hydrogen production Dedicated production of green, e-fuels abroad provides significant cost advantage compared to local generation in Germany "E2Fuels" demonstration and test plant in Haßfurt is a starting point for Siemens engagement in e-fuels One of key enablers for e-fuels: Siemens PEM electrolysis. Siemens targets triple digit electrolysis plants Page 10

11 Dr. Ing. Ireneusz Pyc Siemens AG Power & Gas / Technology Innovation Freyeslebenstrasse Erlangen Phone: +49 (9131) Mobile: +49 (152) Ireneusz.Pyc@siemens.com Thank You