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Lux Research: cost of electrofuels remains far from viable

9 June 2014

Luxelectrofuels
Production costs per barrel of oil equivalent. Source: Lux Research. Click to enlarge.

The cost of electrofuels—fuels produced by catalyst-based systems for light capture, water electrolysis, and catalytic conversion of carbon dioxide and hydrogen to liquid fuels—remains far away from viable, according to a new analysis by Lux Research.

Building a cost model for the electrolysis process—considering electricity from various routes, such as natural gas and coal as well as renewable electricity from biomass, solar, and wind, as well as generously assuming commercial scale production—Lux found that electrofuels produced from microbes cost $230 per barrel, while a catalytic conversion to make electrofuels produces fuels for $208 per barrel.

Based on the current capabilities, water splitting makes up the vast majority of electrofuel production cost, and is the major bottleneck for electrofuels to come within shouting distance of being cost competitive with petroleum. With technology improvements—specifically advances in microbial yield and catalyst efficiency—production costs for electrofuels drop to below $150 per barrel.

Background. In 2009, ARPA-E began its electrofuels program (earlier post) , providing $49 million in funding to 11 academic institutions and an additional two companies to develop microbial organisms capable of converting carbon dioxide and hydrogen into liquid fuels.

Similarly in 2009 and 2010, the US Department of Energy (DOE) funded the University of North Carolina – Energy Frontier Research Center (UNC EFRC) and the Joint Center for Artificial Photosynthesis, respectively. The DOE made a $122 million investment for five years for the latter institute spearheaded by the California Institute of Technology and US DOE Lawrence Berkeley Laboratory.

Both consortiums focus on developing catalyst-based systems for light capture, water electrolysis, and catalytic conversion of carbon dioxide and hydrogen to liquid fuels.

Hydrogen-to-fuels. are various sources of hydrogen, such as steam methane reforming of natural gas and gasification of biomass into syngas that can make hydrogen cheaper. Although not electrofuels in the strict sense, these are best bets at cost parity, in which using conventional natural gas and coal-generated electricity and making hydrogen from natural gas makes fuels cost competitive at just over $90 per barrel of oil equivalent, according to Lux.

The obvious nearer term value will encourage the downstream microbial-conversion and catalytic conversion technologies to move towards alternative hydrogen sources while the water splitters keep toiling—assuming funding is maintained, the research firm suggests.

Electrofuels developers are likely to idle their water electrolysis research and development (R&D) and seek commercialization partners with alternative hydrogen sources, Lux suggests. ARPA-E has already made transitions to focus funding on gas-to-liquids (GTL) technologies amidst cheap natural gas prices in the US in recent years.

The nearer term value for electrofuels will lie in geographies lacking the natural gas bonanza that dominates the US energy landscape today, Lux says.

June 9, 2014 in Biotech, Fuels, Solar | Permalink | Comments (26) | TrackBack (0)

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1. The fuel conversion is physically being done and mass production usually reduces cost by several fold.

2. Oil greed without alternatives has no limit.

Electrofuels..insteresting term, but when you gasify biomass or reform methane, that does not apply. Reforming methane and using extra waste CO2 can make fuel at much lower prices than $5 per gallon in the U.S.

Since biological carbon fixation is so slow, it makes no sense for biofuel processes to dump any of it back to the atmosphere.  If it can't be converted to a useful product, it should be sequestered somehow.

I have to wonder if the $200+/bbl cost of electrofuels is only for liquids.  Could the archaea-mediated electro-driven methane process be cheaper?  If electro-methane can reach cost parity with refined petroleum products, that would allow CNG/LNG vehicles to go carbon-neutral and still be competitive.

EP - I saw a recommendation some time back that biomass be sequestered by dumping it in abandoned mines.

If liquid e-fuels effectively recycle carbon on a 1:1 basis, the process could be close to be carbon-neutral?

However, if would not be carbon negative unless the H2 e-fuel path is used?

most of it depends on the electricity price and catalyst price.
Many promising types of Pt-free catalysts are emerging, which will presumably make electrolysers and fuelcells much cheaper.

Real price for renewable electricity is often almost nothing in Germany and Italy because of abundance of solar and wind power.

With prices of wind and solar continuously decreasing, it will be ever more obvious that these renewables are competitive even if a significant part of the time there is "under/overproduction". (Just as my car, which I consider an acceptable investment, even though it stands idle for >90% of the time). Simply install more solar/wind than you need most of the time, so that even on cloudy days without wind, there is still enough. Any spare electricity on "normal or windy days" can be turned into electrofuels and batteries.
Electrolysers can probably also function as a fuel cell in case the wind doesn't blow at night.
Advanced nuclear might also deliver cheap power, but this remains to be seen.

Good point, Alain.

Referring to page 18 of the following reference, the cost of a kg of H2 is <$3 when electricity cost is $0.05 per kWh.
http://www.nrel.gov/hydrogen/pdfs/50408.pdf

Wind electricity can cost at or under $0.05/kWh.

For solar, if total installed cost of solar PV is $2,000/kW and 1,800 kWh/year for 30 years, then $2,000/(1,800x30)= $0.037 per kWh! If this solar PV electricity is used to make H2, according to NREL's estimation in the link above, H2 will cost ~$2/kWh.

Now, a FCV can travel 2x-3x further per kg of H2 than a comparable ICEV per gallon of gasoline, so a kg of H2, which has equivalent energy to a gallon of gasoline, will result in fuel cost per mile to be 1/2 to 1/4 that of a gasoline-fueled ICEV! I'm very surprised to see that Lux research has not considered NREL's data for H2 cost before compiling this report.

Now, as far as synthetic hydrocarbon is concerned, there are many demonstrations that bio-crude chemically equivalent to petroleum crude can be produced from waste biomass or waste biomass plus renewable H2 for under $100/barrel, ranging from $64-80 per barrel! See:

http://www.renewableenergyworld.com/rea/news/article/2012/11/everyday-low-fuel-prices-drop-in-advanced-biofuels-for-under-100-per-barrel

Now, a barrel of crude oil has 1700 kWh energy and when costing $100, will have the cost per kWh to be $0.059, or almost 6 cents/kWh. Some of this energy will be lost during the petroleum refining process, such that the final products such as gasoline and diesel fuels will cost a lot more per kWh.
If RE at 4-5 cents/kWh is used to produce H2 to be added to the biomass during the hydropyrolysis process to make biocrude, then even the addition of this renewable-energy H2 to the waste biomass in order to double or triple the yield of the biomass will result in the final biocrude costing well under $100/barrel!

In summary, Renewable Energy conversion into synthetic hydrocarbon fuels are already more than cost-competitive with petroleum as of today. No need to wait anymore into the future! Electrolytic H2 when used in FCV's can result in 1/2 to 1/4 the fuel cost per mile in comparison to ICEV's burning gasoline.


Imagine the cost of fuel doubling (not hard, since year 2000). And your GDP and living standards double. It would not be too hard to imagine $208 per barrel fuel looking affordable, particularly if certain modalities become wiser investments of capital than what we have now: (CLCVRC)

Cleaner fuel that takes care of waste recycling and waste production;

locally produced fuel needing no national infrastructure or protracted approvals;

competitive fuel to assuage public fears over fair and disclosed costs;

versatile fuel that can power a car or a home with equal ease and practicality;

reliable fuel that will not obsolesce in relation to a consumer need or a product marketed to satisfy it; and

charitable fuel that will incline sharing of fuel and appurtenant resources to alleviate poverty, with nominal disregard of profitability or personal aggrandizement.

It would take some economic growth to achieve all of this, and Washington is off to a whopping bad start.

SOEC @ 850c - Use combined cycle heat and steam.

Features
Energetic efficiency = ~70%
Cost estimate = 1,00 € / l
High purity
GHG-mitigation potential > 85%

http://www.sunfire.de/en/produkte/stacks/soec-hochtemperatur-dampfelektrolyse

"..making hydrogen from natural gas makes fuels cost competitive at just over $90 per barrel of oil equivalent, according to Lux."

Who wants to perpetuate the use/combustion of liquid fuels and continue to produce GHG?

Wouldn't the world be better off by capturing and storing clean wind and solar energies and use BEVs and FCEVs instead of trying to extend the use of ICEVs?

Long and mid-range commercial flights may be the exception but very high speed e-trains could replace up to 50% of those flights in EU, China, India, USA, Russia, Japan etc.

Harvey,

The 800 million engine powered vehicles are not going to be replaced by EVs any time soon. In fact the world will soon have 1 billion liquid hydrocarbon powered vehicles.

That mean so you need LOTS of fuel, depending only on oil to make those fuels is risky considering OPEC and oil getting harder and more expensive to find.

I wish everyone drove EVs, but wishing and hoping will not make it so. Realities are what they are, you accept them and provide for them, or you have fewer options with more monopoly power for oil companies and oil producing countries.

When you factor in the costs petroleum gets to "externalize" (like climate change, oil wars, and health problems from pollution) electro-fuels look pretty cheap at $200+ per barrel.

@ai vin,

Better still, "electro-fuels" will not cost $200+ per barrel. Synthetic Hydrocarbon liquid fuels will cost well below $100/barrel in today's USD, even when 1/2 to 2/3 of its energy will come from solar and wind electricity and the remaining from waste biomass.

Or even better still, the electrolytic H2 made from solar and wind electricity is estimated by NREL to cost no more between $2-3 USD/kg (energy content equivalent to 1 gallon of gasoline) when solar and wind electricity will cost around $0.04-06 USD per kWh. Use that H2 in a FCV capable of 2-3x the MPGe of an equivalent ICEV and electrolytic H2 will have an equivalent cost of $25-50 per barrel!!!
($100 per barrel of crude is for the oil's raw cost only, the final products such as gasoline and diesel fuels must be transported to refineries and refined at additional costs of money and energy expenditure...to result in $3.5/gallon of gasoline or $4/gal of diesel, the energy cost per kWh will be $0.10/kWh vs $0.059/kWh for crude oil, or 70% higher cost from crude oil to a final product at the pump...while electrolytic H2 produced at the H2 retail station results in a final product right at the station without requiring neither further refining nor any transportation costs.)

Electro-fuels are already costing less than petroleum even today.

Roger, your cost estimates of $2,000/kW and 1,800 kWh/year for 30 years, then $2,000/(1,800x30)= $0.037 per kWh exclude the cost of interest for capital investment. At 5% interest, deferring the repayment of the $200 over 30 years increases the cost to: $3864 and hence the cost of electricity to $0.07 per KWHr. Still pretty good for H2 production but now you need to include the cost of building 800 million FC vehicles and the cost of the H2 distribution infrastructure.

If someone can build a facility that can produce Gasoline a price underneath the current fossil fuel price they will become very rich very quickly because the massive demand.

Still it's nice to estimate the upper-limit for oil prices. If they rise up to $200 per barrel this technology will come into play and put a lid on further rises. Much like Oil Sands and Tight Oil are now.

@msevior,

The 5% interest cost is only if an H2 station owner has no money of his/her own and has to borrow money. Perhaps he/she can get a better loan w/ lower interest. An owner w/ a lot of cash to fork out will come out ahead, since he/she will then be able to make a profit out of the investment when marking up the electricity to 7 cents/kWh, while others who have to borrow money won't become as competitive and have to sell the electricity to above 7 cents/kWh in order to make a profit.

The cost of building 800 million FC vehicles and the cost of the H2 distribution infrastructure will gradually come out of the consumer's pocket when their current cars are due for replacemen, or from private pockets when current gasoline stations are due for rebuilt or replacements.

Remember that those w/ a lot of cash if stashed it somewhere will lose value due to inflation, or if put in banks won't get enough of a return to even cover inflation. When invest in energy infrastructures, there will be a higher potential for gains and a more secure investment, since energy will always be in demand, while fossil fuel energy investment will be under threat due to global warming to force future legislations against GHG emission.

SJC:

There are enough OIL reserves for feed our 1+B gas guzzlers for another 54 years.

That gives us enough time to gradually switch over to electrified vehicles, e-trains, e-boats, e- grass cutters, small e-planes, small delivery e-drones etc and reduce Oil consumption (by 2%/year would be enough)?

@Harvey,
Please don't forget the urgency regarding cessation of GHG emission. We don't have another 54 years. Consider leaving petroleum and coal under the ground as the best forms of carbon sequestration. The push for synthetic hydrocarbon fuels must be just as forceful as the push toward PEV's as well as FCV's, as well as increasing efficiency of ICEV's. Not everyone can tolerate PEV's or FCV's.

We may use less Oil with more efficient ICEVs and e-vehicles and more efficient planes but the developing countries may use more and more oil, at least for the next 20+ years.

Total world oil consumption may not really go down much before 2030 or so. By tapering down after 2030, the world reserves may last till the end of the current century.

Total NG world reserves are good for another 92+ years. That's long enough to replace CPPs and progressively switch to cleaner (Hydro, Sun, Wind, Nuke) e-generation facilities.

What will happen to GHGs and the climate is a major question. We may be due for unpleasant surprises starting with more extreme weather, reduced agriculture productivity, rising ocean levels and major health related problems.

That's true, Harvey, oil will continued to be used in large quantity well into the future. However, if the oil will be synthesized from the combination of waste biomass and CO2-free-H2 from RE and nuclear energy, then this will not cause more CO2 emission and will be sustainable.

What will happen to GHG's and the climate will be entirely up to us today. My goal is to show the world how we can continue our high standard of living and consume a lot of energy, AND create a lot more new jobs WITHOUT releasing any further net CO2 into the atmosphere, completely sustainable. WE now have all the technologies needed TODAY.

Even IF we have 50 years of oil left, it will be harder to find, more expensive to extract and problematic given some countries political situations. Couple that with increased competition for scare resources, the price per barrel rises while the high prices restrict economies and enrich some countries that cause problems.

It would be much better to start with coal and natural gas making fuels at power plants using waste heat. Then phase in more biomass using natural gas for the hydrogen. Free the U.S. from OPEC dependence and become more CO2 neutral. It will be great for our economy, keeping imported oil money in this country to build the fuel plants.

The 5% interest cost is only if an H2 station owner has no money of his/her own and has to borrow money.

<sigh>  Roger, please look up "opportunity cost".

RP...wouldn't we (the world) be better off by moving away from (all) fuel combustion as soon as possible.

The best sustainable clean energy source (the sun) will be around FREE as long as we are around and it is available in 98+% of the places we live.

The cost of converting solar energy and storing it for 24/7 usage is getting lower month after month and is already competitive with CPPs, NGPPs, NPPs, Hydro and Wind in most sunny places.

High quality winds exist in many less sunny places and can also be competitive with the other energy sources mentioned above.

In other words, the world has enough clean Solar and Wind energy potential to satisfy all our energy needs for as long as we are on this small planet. Burning fuels produce GHGs and is no longer a necessity. It should be progressively phased out. Let us electrify....

@E-P,
Please look up Bernie Madorff, Emron, Savings and Loan Scandal...etc

The cash money that you invest in your own business is solid...the more you'll get back in profits, the more return from the investment you'll get. You pay and get to play when you have your own business. When you invest your money elsewhere, you pay but you won't get to play!

An H2 station which caters to the affluent early adopters of FCV's can sell other stuffs and services beside H2 that will bring back even more return than just from the sale of H2.

To max out profits, remove the middle men. When one borrows money, one must service the interest payment to the middle men!

@Harvey,

No doubt, PEV's number will grow substantially. However, many people do not have convenient access to the plug.
Also, you cannot replace the V-twin of a Harley with an electric motor and expect people to buy it, nor can you replace the V-8 of a Corvette or a V-10 of a Viper and expect commercial success! Many people will just stick to ICEV no matter how you'll try to persuade them.
Also, liquid hydrocarbon fuels are very energy dense and can be stored in low-cost container, while battery electricity requires much heavier, bulkier, and much more expensive storage media.
Fuels can be refill in minutes, while battery electricity takes 10-20x longer even with fast charging.

Furthermore, the continuation of ICEV's using synthetic fuels will be more labor intensive and will preserve a lot of jobs, while the switch to PEV's with more reliable and less-maintaince vehicles will take away a lot of jobs.

RP...that was also said about cowboys, horses and buggies, feed and hay producers etc when ICEVs came around. The transition was rather fast. Within 30 to 40 years, very few had riding horses and tractors had taken over from heavier farm horses.

The same will happen again and electrified vehicles will push most ICEVs out of the game in a relatively short time.

EV batteries & FCs energy density will multiply while cost per kWh will come down by 4X to 6X. Low cost quick battery charge and H2 stations will replace current gas & diesel stations by 2040 or so.

Energy station attendants will no longer be required, specially for wireless fully automated quick charge stations.

Jobs will change as it did on farms in the last 100+ years. Cooking and delivering ready to eat meals for others and many other similar new jobs will multiply.

People will adapt and will have to get used to working less.

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