Techno-economic evaluation of retrofitting power-to-methanol : grid-connected energy arbitrage vs standalone renewable energy

Abstract

The power-to-methanol (PtMeOH) will play a crucial role as a form of renewable chemical energy storage. In this paper, PtMeOH techno-economics are assessed using the promising configuration from the previous work (Mbatha et al. [1]). This study evaluated the effect of parameters such as the CO2 emission tax, electricity price, and CAPEX reduction on the product methanol economic parity with respect to a reference case. Superior to previous economic studies, a scenario where an existing methanol synthesis infrastructure is 100 % retrofitted with the promising electrolyser is assessed in terms of its economics and the associated economic parity. The volatile South African electricity market is considered as a case study. The sensitivity of the PtMeOH and green H2 profitability are checked. Grid-connected and standalone renewable energy PtMeOH scenarios are assessed. Foremost, generalisable effect trends of these parameters on the net present value (NPV) and the levelized cost of methanol(LCOMeOH) and H2 (LCOH2) are discussed. The results show that economic parity of H2 (LCOH2 = current selling price = 4.06 €/kg) can be reached with an electricity price of 30 €/MWh and 70 % of the CAPEX. While the LCOMeOH will still be above 2 €/kg at 80 % of the CAPEX and electricity price of 20 €/MWh. This indicates that even if the CAPEX reduces to 20 % of its original in this study, and the electricity price reduces to about 20 €/MWh, the LCOMEOH will still not reach economic parity (LCOMeOH > current selling price = 0.44 €/kg). The results show that to make the retrofitted plant, with a minimum of 20 years of life span, profitable, a feasible reduction in the electricity price to below 10 €/MWh along with favourable incentives such as CO2 credit and reduction in CAPEX, particularly that of the electrolyser, and treatment of the PtMeOH as a multiproduct plant will be required. HIGHLIGHTS • Techno-economics of a 100kton/year retrofitted power-to-methanol are studied. • Grid-connected energy arbitrage and standalone scenarios are investigated. • Generalisable effect trends of key economic bearing parameters are discussed. • To be profitable, a reduction in electricity price to < 10 €/MWh is required. • Power-to-methanol should be treated as a multi-product plant to improve profit.