Green Methanol Production-A Techno-Economic Analysis

Renewable Energy Integration and Production Costs:

The production process for 1 ton of green hydrogen through electrolysis—essential for green methanol production—requires 50 to 55 MWh of electricity. This energy demand underscores the critical role of renewable energy availability and its cost, directly impacting the economic viability of green methanol.

Efficiency and Transformation Costs

Electrolysis, with an efficiency of 60% to 80%, is the first step in transforming renewable energy into green methanol. This efficiency rate affects the hydrogen yield and, subsequently, the quantity of energy converted into methanol. Furthermore, the synthesis process from hydrogen to methanol operates at an efficiency of 65% to 75%, thus influencing the production cost based on the energy and material inputs required.

Capital Investment and Operational Expenditure (CAPEX & OPEX)

The techno-economic analysis also considers fixed capital investment, which encompasses all costs associated with setting up the production facility, including technology costs for electrolysis, carbon capture, and methanol synthesis. Operational expenditure includes both fixed costs, such as labour and maintenance, and variable costs, such as feedstock and energy consumption. These expenditures are critical in determining the profitability and payback period for green methanol plants.

Case studies on a 50 MW Electrolyser + Green Methanol Plant

• Fixed Capital Investment (CAPEX): Initial investments are required for plant scales of 50 MW of electrolyser and 30 MW of methanol.
• Operational Expenditure (OPEX): The annual fixed OPEX for a 50 MW electrolyzer and 30 MW of methanol.
• Variable OPEX: The total annual variable OPEX.
• Net Present Value (NPV): The NPV after 25 years for a plant with a 50 MW electrolyzer and 30 MW of methanol.
• Levelized Cost of Electricity (LCOE): The LCOE for onshore wind energy and photovoltaic (PV) energy.
• Net Production Costs (NPC) of Green Methanol: Approx. 850 USD/t.

Market Price and Economic Competitiveness

For green methanol to be economically viable, it must be competitively priced in comparison to its fossil-based counterpart. The market price for green methanol needs to factor in the higher production costs due to the use of renewable energy and carbon capture technologies. The current market price for fossil-based methanol sets a benchmark that green methanol must approach or undercut to gain market share.

Sensitivity Analysis and Future Outlook

Sensitivity analysis includes plant availability, electricity prices, and the revenue from by-products like oxygen significantly influence the net production cost of green methanol. A robust economic assessment must anticipate and incorporate fluctuations in these parameters into the cost model.

Conclusion

This assessment compelling case for green methanol as a sustainable alternative to traditional fuels, provided that the economic parameters align favourably. The initial high capital investment may be offset by long-term environmental and economic benefits, such as reduced carbon emissions and reliance on renewable energy sources. To realize the full potential of green methanol, ongoing investment in technology development, economies of scale, and supportive policy frameworks are essential. Future scenarios must consider the expected decrease in renewable electricity and electrolyzer costs, potentially making green methanol a cornerstone of sustainable industrial processes.

Dr Mayilvelnathan Vivekananthan M.E.,PhD

Director, Cipher Neutron Inc

[email protected]

www.cipherneutron.com