Skip to main content

LUP Student Papers

LUND UNIVERSITY LIBRARIES

Flexibility in emerging e-methanol production in Sweden - An assessment & case study of technical and economic flexibility potential

Sivert, Henning LU (2024) FMIM01 20241
Environmental and Energy Systems Studies
Abstract
As a part of the climate transition of hard-to-abate sectors such as shipping, aviation, and chemical industry, electrofuels may play a key part. In Sweden, e-methanol has gained interest, and several production facilities are currently planned or under construction. These will be very large electricity consumers, but because of the traditionally inflexible methanol synthesis they may not be able to adapt their consumption in accordance with renewable electricity availability and the needs of the electricity grid. This is not ideal, as the grid is already predicted to face large challenges due to increased electricity demand and more intermittent electricity production. This thesis investigates the possibilities of emerging e-methanol... (More)
As a part of the climate transition of hard-to-abate sectors such as shipping, aviation, and chemical industry, electrofuels may play a key part. In Sweden, e-methanol has gained interest, and several production facilities are currently planned or under construction. These will be very large electricity consumers, but because of the traditionally inflexible methanol synthesis they may not be able to adapt their consumption in accordance with renewable electricity availability and the needs of the electricity grid. This is not ideal, as the grid is already predicted to face large challenges due to increased electricity demand and more intermittent electricity production. This thesis investigates the possibilities of emerging e-methanol production facilities to become more flexible in their electricity consumption as a way of lessening their burden on the electricity system and better correlate with renewable electricity availability. This is done primarily by examining the technical and economic aspects of flexible e-methanol production. Other integral factors such as EU policy and the future of the electricity system are also discussed. The technical assessment was conducted mainly by gathering information from literature and industry, and concludes that the methanol synthesis itself is likely the limiting factor in overall flexibility of an e-methanol plant. The publicly available information on synthesis flexibility is however contradictive, which complicate conclusions. Some industry sources point in a very positive direction, but actual numbers to confirm this are not publicly available. The economic analysis was performed by calculating production costs for plant configurations with varying degrees of flexibility. This was done for eight different assumption cases to examine the impacts of investment costs, electricity prices, and CO$_2$ source. The economic analysis also carries large uncertainties, but indicates that in most scenarios, plants likely could be designed with at least some flexibility capacity without increasing costs compared to constant operation configurations. Even a small amount of flexibility could however be very valuable from a grid standpoint. Under the most favorable investment cost assumptions, designs with very high degrees of flexibility were economically feasible, and as much as 12\% of production costs could be saved compared to designs for constant operation. Signs from industry however point to these assumptions being very optimistic, at least for the near future. In addition to investment costs, electricity prices are also shown to have a very large impact on production costs and flexibility. Both investment costs and electricity prices are however very difficult to predict for the future. As e-methanol is likely economically uncompetitive compared to fossil alternatives, policy is integral in enabling implementation. EU policies such as the Renewable Energy Directive, EU ETS, FuelEU Maritime and ReFuelEU Aviation have the potential to create important markets for e-methanol. They do however not differentiate between e-methanol and other comparable renewables, meaning it still has to compete against these. The EU's delegated acts on renewable fuels of non-biological origin provide a clear framework for e-fuel production, and the more stringent demands on correlation with renewable electricity production from 2030 will likely increase the importance of flexibility in the future. A large scale-up of e-methanol prodution would have a significant impact on the electricity system. The transition of all current Swedish marine transport to e-methanol could mean more than 50 TWh of additional electricity demand per year. As such, scale-up of low-carbon electricity production and upgrades in the grid are likely prerequisites for widespread e-methanol production. Increased flexibility could help facilitate the integration of new plants into the grid. (Less)
Abstract (Swedish)
Som en del i klimatomställningen av svåråtkomliga sektorer som sjöfart, flyg, och kemiindustri kan elektrobränslen komma att spela en viktig roll. I Sverige har e-metanol väckt intresse, och flera produktionsanläggninar är planerade eller under byggnation. Dessa kommer att vara stora elkonsumenter, men på grund av den traditionellt icke-flexibla metanolsyntesprocessen finns det frågetecken kring hur väl dessa anläggningar skulle kunna anpassa sin konsumtion efter elnätets behov och tillgången på förnybar el.
Eftersom elnätet redan spås utsättas för stora prövningar på grund av ökande elefterfrågan och mer variabel elproduktion hade nya icke-flexibla storkunsumenter därmed inte varit optimalt. Detta examensarbete undersöker möjligheterna... (More)
Som en del i klimatomställningen av svåråtkomliga sektorer som sjöfart, flyg, och kemiindustri kan elektrobränslen komma att spela en viktig roll. I Sverige har e-metanol väckt intresse, och flera produktionsanläggninar är planerade eller under byggnation. Dessa kommer att vara stora elkonsumenter, men på grund av den traditionellt icke-flexibla metanolsyntesprocessen finns det frågetecken kring hur väl dessa anläggningar skulle kunna anpassa sin konsumtion efter elnätets behov och tillgången på förnybar el.
Eftersom elnätet redan spås utsättas för stora prövningar på grund av ökande elefterfrågan och mer variabel elproduktion hade nya icke-flexibla storkunsumenter därmed inte varit optimalt. Detta examensarbete undersöker möjligheterna för framväxande e-metanolanläggningar att bli mer flexibla i sin elanvändning som ett sätt att minska bördan på elsystemet och bättre korrelera med tillgången på förnybar el. Detta görs främst genom att undersöka tekniska och ekonomiska aspekter av flexibel e-metanolproduktion. Andra centrala faktorer som politiska styrmedel och elsystemets utveckling berörs också. Den tekniska utvärderingen genomfördes främst genom att samla information från litteratur och industrin, och bekräftar att metanolsyntesen sannolikt är den primära flaskhalsen för flexibel e-metanolproduktion. Den öppet tillgängliga information som finns om metanolsyntesflexibilitet är dock motsägelsefull, vilket försvårar möjligheterna att dra tillförlitliga slutsatser. Vissa industrikällor pekar i en mycket positiv riktning, men den data som hade behövts för att bekräfta detta finns dessvärre inte öppet tillgänglig. Den ekonomiska analysen genomfördes genom att beräkna produktionskostnader för anläggningskonfigurationer med varierande flexibilitetsgrad. Detta gjordes för åtta olika fall för att kunna utvärdera påverkan av olika antaganden för investeringskostnader, elpriser och CO$_2$-källa. Den ekonomiska analysen har likt den tekniska stora osäkerheter, men tyder på att under de flesta antaganden kan anläggningar designas med åtminstone viss flexibilitetskapacitet utan att produktionskostnaderna ökar jämfört med att designa för konstant produktion. Även en liten grad av flexibilitet kan dock vara värdefullt ur ett elsystemperspektiv. Under de mest gynnsamma antagandena för investeringskostnader var designer med mycket hög flexibilitetsgrad ekonomiskt genomförbara, och produktionskostnaderna kunde minskas med upp till 12\% jämfört med att designa för konstant produktion. Dessa antaganden är dock i nuläget mycket optimistiska, åtminstone att döma av information från industri och näringsliv. Utöver investeringskostnader visar analysen även att elpriser har en stor påverkan på resultatet. Framtiden är dock svår att förutspå, både för investeringskostnader och elpriser. Eftersom e-metanol sannolikt inte kan konkurrera ekonomiskt med fossila alternativ är politiska styrmedel centrala för att gynna implementeringen. EU-styrmedel som förnybartdirektivet, utsläppshandelssystemet, FuelEU Maritime och ReFuelEU Aviation har potentialen att skapa viktiga markader och mer gynnsamma marknadsförhållanden för e-metanol. Dessa skiljer dock inte på e-metanol och andra jämförbara förnybara alternativ, så e-metanolen kommer fortfarande behöva konkurrera med dessa. EU:s delegerande akter om förnybara bränslen av icke-biologiskt ursprung sätter tydliga ramar för produktionen av e-metanol, och de mer stränga kraven på korrelation med förnybar elproduktion från 2030 kommer sannolikt öka vikten av flexibilitet i framtiden. En storskalig utbyggnad av e-metanolproduktion skulle ha en betydande påverkan på elsystemet. Omställningen av all svensk sjöfart till e-metanol skulle kunna innebära drygt 50 TWh extra elkonsumtion om året, runt en tredjedel av Sveriges nuvarande elproduktion. Utbyggnad och upprustning av elnätet och en storskalig utbyggnad av fossilfri elproduktion kommer därmed sannolikt vara förutsättningar för att kunna genomföra en storskalig uppbyggnad av e-metanolproduktion. Ökad flexibilitet hade kunnat underlätta integreringen av nya anläggningar i elnätet. (Less)
Please use this url to cite or link to this publication:
author
Sivert, Henning LU
supervisor
organization
alternative title
Flexibilitet i framtida svensk e-metanolproduktion - en studie över teknisk och ekonomisk flexibilitetspotential
course
FMIM01 20241
year
type
H3 - Professional qualifications (4 Years - )
subject
keywords
Electrofuels, e-methanol, eMethanol, methanol, flexibility, PtX, Power-to-X, PtL, Power-to-Liquid
report number
ISRN LUTFD2/TFEM—24/5215–SE + (1-55)
ISSN
1102-3651
language
English
id
9166378
date added to LUP
2024-06-20 10:06:23
date last changed
2024-06-20 10:06:23
@misc{9166378,
  abstract     = {{As a part of the climate transition of hard-to-abate sectors such as shipping, aviation, and chemical industry, electrofuels may play a key part. In Sweden, e-methanol has gained interest, and several production facilities are currently planned or under construction. These will be very large electricity consumers, but because of the traditionally inflexible methanol synthesis they may not be able to adapt their consumption in accordance with renewable electricity availability and the needs of the electricity grid. This is not ideal, as the grid is already predicted to face large challenges due to increased electricity demand and more intermittent electricity production. This thesis investigates the possibilities of emerging e-methanol production facilities to become more flexible in their electricity consumption as a way of lessening their burden on the electricity system and better correlate with renewable electricity availability. This is done primarily by examining the technical and economic aspects of flexible e-methanol production. Other integral factors such as EU policy and the future of the electricity system are also discussed. The technical assessment was conducted mainly by gathering information from literature and industry, and concludes that the methanol synthesis itself is likely the limiting factor in overall flexibility of an e-methanol plant. The publicly available information on synthesis flexibility is however contradictive, which complicate conclusions. Some industry sources point in a very positive direction, but actual numbers to confirm this are not publicly available. The economic analysis was performed by calculating production costs for plant configurations with varying degrees of flexibility. This was done for eight different assumption cases to examine the impacts of investment costs, electricity prices, and CO$_2$ source. The economic analysis also carries large uncertainties, but indicates that in most scenarios, plants likely could be designed with at least some flexibility capacity without increasing costs compared to constant operation configurations. Even a small amount of flexibility could however be very valuable from a grid standpoint. Under the most favorable investment cost assumptions, designs with very high degrees of flexibility were economically feasible, and as much as 12\% of production costs could be saved compared to designs for constant operation. Signs from industry however point to these assumptions being very optimistic, at least for the near future. In addition to investment costs, electricity prices are also shown to have a very large impact on production costs and flexibility. Both investment costs and electricity prices are however very difficult to predict for the future. As e-methanol is likely economically uncompetitive compared to fossil alternatives, policy is integral in enabling implementation. EU policies such as the Renewable Energy Directive, EU ETS, FuelEU Maritime and ReFuelEU Aviation have the potential to create important markets for e-methanol. They do however not differentiate between e-methanol and other comparable renewables, meaning it still has to compete against these. The EU's delegated acts on renewable fuels of non-biological origin provide a clear framework for e-fuel production, and the more stringent demands on correlation with renewable electricity production from 2030 will likely increase the importance of flexibility in the future. A large scale-up of e-methanol prodution would have a significant impact on the electricity system. The transition of all current Swedish marine transport to e-methanol could mean more than 50 TWh of additional electricity demand per year. As such, scale-up of low-carbon electricity production and upgrades in the grid are likely prerequisites for widespread e-methanol production. Increased flexibility could help facilitate the integration of new plants into the grid.}},
  author       = {{Sivert, Henning}},
  issn         = {{1102-3651}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Flexibility in emerging e-methanol production in Sweden - An assessment & case study of technical and economic flexibility potential}},
  year         = {{2024}},
}