Feasibility assessment of e-methanol value chains: Temporal and regional renewable energy, costs, and climate impacts

Abstract

A power-to-X economy can provide low-carbon alternatives to a fossil-based economy, thereby mitigating climate change. E-methanol is a potential alternative but is currently not economically feasible, mainly due to the cost of hydrogen production. Other factors impacting feasibility include the source of carbon dioxide, storage, investment time, capital cost and regulation. Furthermore, multiple industrial operators need to establish a power-to-X value chain, all seeking profitable business opportunities. A cross-disciplinary study was conducted to analyse the influence of these different factors on economic and environmental feasibility. Dynamic modelling was used to optimize e-methanol production based on variable renewable energy generation. Life cycle assessment and costing were used to compare the economic and environmental sustainability of the studied value chains. Over 30-years, the discounted net cash flow of a value chain can become profitable with sufficiently low electricity prices (less than 37€/MWh) and considerable investment subsidies for hydrogen producer. Similar profitability can be achieved with the electricity price given and without subsidies when the weighted average cost of capital is low (5 %). Therefore, hydrogen producers may face challenges in generating profit; highlighting the need for profit-sharing in the value chain and/or subsidies. As capital expenditure for certain technologies is predicted to decline, gradually increasing the production capacity with timed investments is preferable. However, trade-offs may arise in climate change mitigation if investments in cleaner alternatives are delayed.