Techno-economic optimization of e-methanol production integrated with oxy-fuel power plants: an adaptive power management case study in Australia

Abstract

The urgent need to decarbonize the energy and chemical sectors necessitates innovative pathways that integrate renewable energy with carbon utilization. This study presents a novel Power-to-Methanol (PtM) system. It uniquely combines solar-driven hydrogen supply via a thermochemical method, flexible operation tied to electricity markets, and detailed techno-economic modelling, distinguishing it from previous e-methanol integration research. The CO₂ utilized in the methanol synthesis unit is sourced from a retrofitted oxy-fuel power plant. Among the evaluated configurations, the best option achieves a capture rate of 350.1 kg_CO2/MWh, with an associated efficiency penalty of 6.7%. Despite these promising features, the standalone carbon capture approach yields a high CO₂ avoidance cost of $217.4/t_CO2, making it economically unviable. This study investigates the conversion of captured CO₂ into methanol to improve economic feasibility, thereby creating financial incentives for the adoption of advanced capture technologies. A detailed commercial-scale modular e-methanol production unit (750 t_MeOH/day) is presented. The system operates dynamically, adapting to fluctuations in electricity markets to improve economic returns through flexible grid interaction. Required hydrogen and oxygen are supplied via a solar-driven Copper–Chlorine (Cu–Cl) thermochemical cycle. Multi-objective optimization identifies the optimal design, achieving a Levelized Cost of Methanol (LCOM) of $1,190/t_MeOH, an overall efficiency of 11.8%, and a specific avoided CO₂ of 1.2 t_CO2/t_MeOH. The produced e-methanol remains non-competitive with grey methanol. However, future projections for 2050 indicate that, under anticipated CO₂ incentive schemes and reductions in critical cost components, the LCOM could decrease significantly to $745/t_MeOH.