Techno-economic Optimization for Large-Scale Power-to-methane Systems : Techno-economic modeling, design and optimization of a large scale 2.0 TWh/y solar-to-methane plant concept in Australia

Abstract: Industrialized societies are built on the limited, extraordinary dense form of energy that are the fossil fuels: coal, oil, and gas, that became the core driver of the economic growth since the industrial revolution. While most emission pathways highlight the necessity to reach net zero emissions before 2050, there are numerous challenges to the displacement of fossil fuels by renewable energy systems (local conditions, intermittency, raw materials) and applications to the most polluting sectors such as transportation remain a major challenge. Among the mix of applicable solutions, lower-impact substitutes of fossil fuels can be envisaged to directly decarbonize hard-to-abate sectors. By using already existing massive infrastructures from the fossil industries, low-carbon drop-in fuels can directly displace their fossil counterparts with little or no change in the midstream (e.g.: logistics) and downstream (e.g.: usage) value chains. Based on this observation, this study aims at exploring the opportunities to produce synthetic low-carbon methane at a large scale, based on a low-cost variable energy source. Synthetic methane is an e-fuel that is obtained in a two-step process: hydrogen production through water electrolysis, followed by the reaction of hydrogen with carbon dioxide in a methanation step to produce synthetic methane (Sabatier reaction). A case study is proposed for the yearly production of 2.0 TWh of synthetic methane in Australia from a low-cost, large scale solar facility. To estimate the economic performance of such asystem, a physical model is built, based on techno-economic assumptions from the literature and recommendations from industrials. Computational methods are applied to predict the most competitive solar-to-methane plant design that minimizes the levelized cost of energy produced. As a result, this study shows the potential for producing e-methane at a levelized cost close to 70 €/MWhth assuming a power cost as low as 15 €/MWhe and using already existing mature technologies. Further gains are to be achieved by higher efficiencies, better suited power sources, which could potentially bring down the cost down to 55-60 €/MWth. However, the availability of concentrated carbon dioxidestreams as well as the life-cycle environmental impact (impact on climate, biodiversity, use of scarce resources) of the e-fuel must be further assessed.