With Great Power Comes Great Responsibility

Jul 8, 2018

Great Power: Renewable Energy

Renewable energy is a clean source of energy, but it does not provide continual supply in order to meet baseload, cycling and peak energy demand. Solar and wind resources are both intermittent, thereby necessitating combinations of either energy storage or fossil fuel generation in order to enable proper load management, load balancing, optimization, balancing, levelling, and grid stability. Current energy storage technologies, such as batteries, are making major strides in advanced development and commercialization for utility scale applications, but much simpler answers for reducing global greenhouse (GHG) emissions are also available.

Great Responsibility: Sustainability

Many major industrial processes are based upon large energy inputs.  These are generally in the form of electrical power and heat (typically achieved by combustion or utilization of fossil fuels), and also hydrogen—not as a fuel source but a reactant. Some are based entirely upon electrochemistry. If these key processes were to effectively utilize renewable sources of power as the energy inputs or to generate the required hydrogen, the potential reduction in GHG emissions could qualify the resulting product as carbon negative.

Many leading global corporations are taking an active role in bringing sustainable solutions to their customer base and demographics. As an example, Audi is using renewable hydrogen (via electrolysis with renewable power) to reform CO2 from biogas production to produce renewable methane as a vehicle fuel[i]. Further, Akzo Nobel is focused on opportunities for renewable hydrogen and chemicals from renewable electricity[ii]. In addition, Carbon Recycling International produces methanol from renewable hydrogen (produced via electrolysis with geothermal based power) and CO2. [iii]

Whether it is "power-to-power", "power-to-gas", "power-to-chemicals" or "power-to-heat" or vice versa, there is always a power play. Many existing industries that have high hydrogen consumption could be “greened” with the simple addition of renewable power to generate the hydrogen. Some hydrogen intensive applications:

  • CO2 Reforming
  • Chemical Production
  • Petroleum Refining
  • Aerospace
  • Metalworking
  • Semiconductor/Electronics Manufacturing
  • Biofuels Production (e.g., HVO Renewable Diesel)

Also, there are some power intensive industries that could be substantially “greened” with the simple switch to renewable power. 

  • Chloralkali
  • Acetylene (Carbide Process)
  • Lithium Production
  • Silicon Production
  • Cement production
  • Aluminum and Steel Production 
  • Electrofuels

The following figure provides a flowchart, with viable process pathways and routes, of some of the products that can be produced, mainly with power—and thus the production of which could be substantially “greened” if renewable power were utilized for the production. It should be noted that most of these have existing large markets.

Power to the End-Customer

Many of the products of renewable power-to-chemicals shown in the above figure could also be used (in times of increased and critical demand) as a fuel for power generation in some cases—leading to a national security, energy security and energy independence angle for the development of the domestic industry. Sources such as methanol, DME, hydrogen, syngas, as well as the syngas derivative products can be utilized to generate power—albeit with large losses to the inefficiency of the conversion processes.  In most cases, these may not qualify the technology as a means of economic energy storage (e.g., as compared to flow batteries), but it may produce a chemical and/or a fuel that is competitive against incumbent fossil-based products.

Due to the potential impact of price elasticity of demand and end-customer purchasing power, selling price and market size along with market segmentation must also be matched. Nexant’s price volume exclusion curve shows that, for products with higher prices, generally the market is smaller, while for larger volume commodities, the prices are significantly lower.

The various options as well as combinations that will make the most sense for new technology platforms, obviously, will be the highest value products. Although this may seem obvious, much government support for renewable sources actually favors fuels and bulk chemicals, while a reasonable development arc for any technology platform would suggest the greatest good can be accomplished in the reverse order. The following figure provides Nexant’s depiction of the typical technology platform development arc.

For power-to-fuels technologies, this technology platform development arc is less of a stringent roadmap for development (and more a roadmap for maximizing profits) as most of the individual required technologies in the value chain are already profitably commercially operating (if not yet in an integrated matter) for all the technologies listed—except for the electrofuels and electrochemicals, which are still at early stages of research, development, and demonstration. Thus, the real function of the cost of production/generation, in this case, will be the cost of renewable electricity—which HAS followed this development arc and is now competitive with fossil fuel based generation for meeting peak load demand (and in some cases, on the basis of “dispatchable” levelized cost of energy (LCOE), is the low cost generator). It should be noted that it is significantly cheaper in some niche cases (e.g., geothermal power in Iceland), leading to significant opportunities. This is important, as stated previously, because many of the most easily produced products are large commodity chemicals. Nascent electrochemical technologies may hold the key to accessing higher value products with lower cost power.

Read all about it in Nexant's forthcoming Biorenewable Insights report, Electrochemicals and Electrofuels.