Artificial Photosynthesis JCAP Scientist: Joel Ager C2M Team: Ismael Ghozael Luc-Emmanuel Barreau Timothy Kelly Wesley Chen
JCAP project, support and funding 2 At the California Institute of technology, they re developing a way to turn sunlight and water into fuel for our cars President Obama, SOTU January 25 th, 2011 JCAP funding: $122 Million over 5 years July, 2010 JCAP formed 2016 2021 2026 Discovery of efficient and cheap materials Assembly of pieces into scalable system Increased efficiency; variety of fuel types
Artificial Photosynthesis Process 3 H2O O2 CO2 High Voltage PV absorber Integrated steps Electrolysis H2 Liquid Fuel Production Liquid fuels (Methanol) Invention (patent pending): Micro-integration of the photovoltaic absorber, the catalyst and water High efficiency, scalability. This technology is very early stage (<1 Year in). Many technical unknowns Cost target Daily production volume Purity
Value proposition 4 Integration: Higher efficiency and scalability Distributed & Modular Carbon neutral process Stable feedstock prices
Project approach 5 Products considered Rationale Hydrogen is produced by JCAP s prototype O2 Oxygen is produced by JCAP s prototype Methanol Methanol is the simplest credible fuel candidate to synthesize Goal: To determine target cost of products and market characteristics for artificial photosynthesis to be competitive in these existing markets
Hydrogen Markets 6 Total H 2 US Market 2010: $22bn 9bn Metric tons Consumption Range Very small 200-220 kg/day Industry Small 1000 kg/day 97% of consumption Medium 6.0 metric tons/day Large 20 metric tons/day
Hydrogen production overview 7 US production capacity, Million metric Tons US production: 10.7 size Generation Steam Methane Reforming (SMR): 95% Centralized Distributed Electrolysis: 4% Mostly distributed Source: "The impact of increased use of Hydrogen", DoE
Production costs: heavy sensitivity on feedstock 8 Average US - grid $/kg of Hy ydrogen Wind Source: www.eia.doe.gov, team analysis Solar PV Hawaii- grid Source: "The impact of increased use of Hydrogen", DoE.
Hydrogen distribution costs 9 Quantity Type Cylinders Tube trailer Cryogenic truck Pipeline % Market 3% small 7% small 90% small merchant merchant merchant Large merchant Cost n.a. 2.6 $/kg 1.7 $/kg 0.98 $/kg Sensitivity n.a. 40c/100km 8c/100km 15c/100km Infrastructure 1200 mi, 95% in Texas and Louisiana Source: Hydrogen and fuel cells: The US market report (picture), hydrogen.pnl.gov, DOE hydrogen project
Total costs of Hydrogen 10 Target Cost: <$6.70 $/kg Source: "Hydrogen supply: cost estimates, NREL, Hydrogen and fuel cells: the US market report
Hydrogen Target market selection 11 First target: Distributed H 2 Premium value (competing tech costs of 6.7$/kg) Modularity valuable to customers Limited / no switching costs Operational limitations of the technology Low pressure output Intermittent production (solar) => Need for storage
Additional Possible Product: O 2 12 Electrolysis: 9kg H 2 O -> 8kg O 2 + 1 kg H 2. O 2 : 0.21$/kg (liquid), Premium H 2 : 6 $/kg H 2 value = 6$, O 2 value=1.6$. O 2 is a by-product. Market Hurdles? Decision Premium O 2 - Medical gas O 2 +H 2 Petroleum refining O 2 +H 2 Rocket fuel (NASA) - Purity - Regulatory: only electrolysis currently approved - Use of H 2 unclear: hospitals unwilling to operate small fuel cells - Competing with captive production - Usage is liquid H 2 and O 2. Liquefaction would be cost-prohibitive Go, go under conditions, no-go
Why Methanol? - Short technology path - Low manufacturing switching cost. - Regulatory environment is favorable - Credible fuel alternative Source 1 : energy.gov Source 2: ethanolrfa.org/pages/statistics#b
Methanol markets 14 Mature markets Traditional use Formaldehyde Acedic Acid Dimethyl Terephtalate Methyl Chloride Growth markets Energy use Fuel blending DME Biodiesel
Worldwide market for methanol 15 Market size: US imports : $1.6bn World market : $20bn Annual Growth: 1996-2009 CAGR 4.2% 2010-2015 CAGR 7.3% Drivers: Fuel category Chinese policy Source 1 : Methanex report 2009. Source 2: DeWiitt & Co 2011
Methanol production cost 16 60% of production cost 25% of cost 15% of cost Source : http://www.methanex.com/investor/documents/investorpresentation-april2011_000.pdf
Methanol storage and distribution 17 1225T Imports: 64% NE + 19% MW + 34% 24 T $0.42/KG SE + 14% Truck/railroad movement Source 1 JJ&A Global Methanol Report Source 2- picture : Dewitt Study Barge movement
H 2 target cost for competitive price 18 Transport Distribution 42% Other 53% Transport (*) 47% Carbon capture H 2 generation Pump Price $0.67/kg Production 58% Separation 15% Synthesis 25% Syngas 60% Distributed Generation Distributed H 2 + captured CO 2 $0.37/Kg (55% of cost) CO 2 $0.10/Kg H 2 $0.27 Or $2.16/Kg Cost breakdown Methanol retail price Artificial Photosynthesis Alternative Source 1: Price MarkUp Methanol institute (Methanol flexible Fuel vehicle) Source 2: Pump price Methanol Market /retailer price Source 3: Carbone capture - http://sequestration.mit.edu/pdf/david_and_herzog.pdf* (*) Truck transport to MidWest location
Methanol: Longer-term opportunity 19 Today the demand for methanol is happy with its supply, DOW Chemicals TRUE: The market is indeed in equilibrium BUT growth is strong, driven by the fuel market. This technology has the potential to accelerate this trend. The methanol industry is extremely efficient. To compete, the cost target for H 2 with artificial photosynthesis has to decrease to 2 $/Kg. Potential accelerating factors Decrease in the cost of Carbon capture. Carbon Tax Increased technology integration encompassing to the fuel generation.
Artificial photosynthesis roadmap 20 Sensitivity: electricity costs Technology Development Sensitivity: natural gas price Sensitivity: CO 2 price Source: BCC research, team estimates
21 Appendices
22 Appendix Hydrogen pipeline infrastructure
23 Appendix Hydrogen Tube trailers and liquid bulk markets
24 Appendix Hydrogen total costs
25 Appendix Hydrogen distribution costs
26 Appendix US grid electricity prices by location Source: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html
Appendix - Hydrogen Legal Landscape 27 Federal investments in Hydrogen-related technology is ongoing: See Energy Policy Act of 2005 Safety Guidelines for use of Hydrogen are governed by the DOE's Hydrogen Safety Review Panel
Appendix - Why Methanol is a credible fuel! 28 The Open Fuel Standard First introduced in the U.S. Congress in 2009, the Open Fuel Standard Act would ensure the widespread adoption of alcohol-fuel compatible FFVs. These bills with slight variation in current House and Senate forms would require that at least 50% of the vehicles produced for the U.S. market that use an internal combustion engine (which would include plug-in hybrid vehicles) must be compatible with blends up to both M-85 and E-85 fuel by the year 2012. The same rule would apply each year until 2015, at which time 80% of vehicles produced for the U.S. must be fuelchoice enabling vehicles. The cost for these conversions would be about $50 - $150 per car, and at current prices, a driver would save more than that annually in fuel costs if they filled up with M-85 all year long. The unsubsidized cost of methanol on an energy party basis currently averages about 90% of the cost of regular unleaded fuel.
29 Fuel energy density
30 Appendix - Methanol : Production cost Methanol Plant
31 Appendix - Methanol market is fragmented
32 Appendix - Methanol Spot price
33 Appendix - Methanol Use by derivative
34 Appendix - Methanol (ageing) production facility
Appendix - Methanol SMR Costs models 35 Mainstream process: Producing Methanol :costs Gas reforming using natural gas feedstock. $0.102 $0.105 $0.025 Fixed Cost (industry norm) financing cost Low Cost Methanol process $77 per tonnes out of the gate. Variable cost of production Assumptions: -25 year useful life plant - Gas cost low US$1 MMBTU - Finance 70:30 debt/equity at 8% on 10 years
Appendix - Methanol Storage Cost 36 Storage costs are negotiable and vary depending on the product, tank size, special equipment required, mode of in and out bound shipments, contract terms, etc. In a broad sense, a public terminal company would charge a base rate per ton, per month for methanol stored in a 12,600 metric ton (100,000 barrel) tank on a year s contract. This base charge would include four tank capacity throughputs (50,400 mt/400,000 bbls) per year, and some extra incidental costs such as loading tank trucks and cars. Depending on customer/contract status, these terms are negotiable, particularly if more frequent throughputs are required. Four tank capacity throughputs per years (about a turn per quarter) are fairly standard. Storage costs per ton can be reduced significantly by increasing the number of throughputs per year. Source 1 : Dewitth & Co