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

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.