Discussion Paper

Power-to-x technologies are available, capacity increase allows cost degression

Chapter 3.3

Technologies for powerfuels production are tried and tested

Various possible powerfuel processes, end products and example applications.

Electrolysis ((Strategieplattform Power-to-Gas, 2018b) and (IRENA, 2018a))

Irrespective of the end product, all powerfuel production processes start with Electrolysis. Hydrogen electrolysis refers to the splitting of water into hydrogen and oxygen through the use of electrical energy. There are three main electrolysis methods, described below.

  • Alkaline electrolysis (TRL 9, efficiency 62% - 82%)
    • Low temperature conversion process ranging between 50-80 degrees Celsius. The separation of product gases and hydroxide ions through two electrodes which operate in liquid alkaline.
    • ALK electrolyser technology is fully mature. It has been used by industry since the 1920s for non-energy purposes, particularly in the chemicals industry (e. g. chlorine manufacture).
  • PEM proton exchange membrane (TRL 8, efficiency 65% - 82%)
    • Low temperature conversion process ranging between 50-80 degrees Celsius
    • PEM is electrolysis which is equipped in a cell with a solid polymer electrolyte (SPE). As a result, the conduction of protons, electrical insulation of electrodes and divergence of product gases occurs. Compared to alkaline electrolysis, PEM was created to overcome issues regarding low current, partial load, hydrogen density and power pressure issues surrounding alkaline electrolysis operations (Areva H2Gen, 2019).
    • PEM electrolyser technology is rapidly emerging and entering commercial deployment. State-of-the-art PEM electrolysers can operate more flexibly and reactively than current ALK technology. This offers a significant advantage in allowing flexible operation to capture revenues from multiple electricity markets, as PEM technology offers a wider operating range and has a shorter response time.
  • SOEC solid oxide electrolyser cell (TRL 6, efficiency 65%- 85%)
    • High temperature conversion process which continues to have small scale pilot projects running on the ground (Agora Verkehrswende, Agora Energiewende, & Frontier Economics, 2018, p. 61).
    • By using solid oxide or electrolytes or particular ceramics, it runs on regenerative mode to produce hydrogen.
    • SOEC technology holds the promise of greater efficiencies compared to ALK and PEM. However, SOEC is a less mature technology, only demonstrated at laboratory and small demonstration scale.


In the methanization process, hydrogen is further processed by the addition of carbon dioxide to produce methane. Catalytic methanization (TRL 8, efficiency 77% - 83%) requires a catalyst based on nickel and is already being used in the commercially used. In addition, a biological methanization (TRL 7, efficiency 77% - 80%) using microorganisms is carried out.

Propane and Liquid Synthesis

Synthetic liquid fuels could be produced either through the Methanol synthesis or the Fischer-Tropsch process.

  • Methanol synthesis (TRL 8, efficiency 56% up to 66%)
    • In this method, Methanol is produced from syngas (mixture of hydrogen, carbon monoxide, and carbon dioxide.
    • Methanol has multiple uses as it is both a fuel type as well as a chemical commodity. Methanol can be burned as a synthetic fuel, converted to transportation fuels such as DME, gasoline and jet fuel. It can also be converted to other chemical intermediaries and also further processed to obtain plastics etc. (Agora Verkehrswende et al., 2018, p.70).
  • Fischer-Tropsch synthesis (TRL 8, efficiency 56%2017 up to 66%2050e)
    • In this process the carbon dioxide is first converted to carbon monoxide using Reverse Water-Gas shift reaction. Carbon monoxide and hydrogen are then used to produce the required liquid fuel (Agora Verkehrswende et al., 2018, p. 70).
  • Hydroformulation (TRL 8, efficiency 62%2019 up to 70%2050e) (Swedish Biofuels, 2019)
    • The synthesis gas is created as a combination of hydrogen and carbon monoxide. This synthesis gas is then converted to C2 to C5 alcohols, which are subsequently subjected to hydroformulation and isomerization and are thus converted into fuel products.


  • Ammonia synthesis (TRL 7-9) (Institute for Sustainable Process Technology (ISPT), 2017)
    • Conventional production of Ammonia uses Hydrogen produced by steam reforming of Natural Gas. Green Hydrogen produced from electrolysis could be used instead. Since there are no commercial applications of Power-to-Ammonia process, its TRL is considered as 7. But conventional ammonia production is an established process (Haber-Bosch) and since there is only a change in the Hydrogen feedstock source, technology maturity is high.

Carbon Capture

There are two primary ways for obtaining CO2. They are

  • Capture from concentrated sources (TRL 6-9)
    • Industrial emissions have to be purified and subsequently CO2 is extracted. Based on the specific technology used, the TRL varies.
    • Biogenic sources like for example biogas, ethanol production also produces CO2, here the need for purification is much lesser compared to industrial sources.
  • Direct Air Capture (TRL 6)
    • Companies like Carbon Engineering and Climeworks have showcased in pilot studies the ability to capture CO2 from ambient air.

It should be noted that in order to contribute to the reduction of GHG emissions, no CO2 should be produced due to the sole purpose of providing input for powerfuels. Furthermore, powerfuels should not be the decisive factor to invest in or maintain fossil-based emitting technologies (e.g. using CO2 from fossil power generation should not prolong the life-cycle of the plants).

Outlook on technologies for powerfuels

Various individual technologies that are part of Powerfuel processes are already available.

In order to reduce the costs of producing powerfuels, plants require constant operation throughout the year. This needs to be aligned with a fluctuating supply of regenerative electricity, which requires storage further up the production chain (e.g. hydrogen or battery storage). These processes are in the current development through earlier mentioned pilot studies.

Since the electrolysis step is common for all of these processes, the scale of these projects could be better understood by considering the electrolyser capacities. In the past, with few exceptions like the Energiepark Mainz in Germany (6 MW, installed in 2015) and the Guangdong Synergy project in China (3 MW, installed in 2017), most electrolysers installed had less than 2 MW capacity. According to the IEA World Energy Investment Report (IEA, 2018c, p. 221), the annual worldwide electrolyser capacity addition from 2010 to 2017 has been below 20MW per year. However this is rapidly changing, as industries start to realise the importance of powerfuels, resulting in announcement of several planned projects with electrolyser capacities up to 100 MW. The yearly planned electrolyser investment for the upcoming years exceeds 40 MW, thus indicating the growth of the electrolyser investments.

Most important cost drivers

Regional weighted average levelised cost of electricity by renewable power generation technology for 2016 and 2017 Picture: based on (IRENA, 2018b, p. 40)

Electricity costs is the main driver behind for powerfuel costs followed by carbon capture costs (Deutsche Energie Agentur & Ludwig-Bölkow Systemtechnik, 2017, p. 87). The cost of producing synthetic liquid fuels and gases vary substantially between fuels and for the different assumptions drawn regarding underlying cost figures (World Energy Council - Germany, 2018, p. 70). Powerfuels plants located outside the EU can expect equivalent full-load period of up to 7,000 hours per year with renewable electricity from combination of wind and PV systems. Cost reductions require considerable, early and continuous investments in electrolysers and CO2 absorbers.

Electricity generation costs (Deutsche Energie Agentur & Ludwig-Bölkow Systemtechnik, 2017, p. 87 | Agora Verkehrswende et al., 2018, p. 82)

Naturally, generation costs of electricity from renewable energies highly depend on the amount of full-load hours. The larger the number of full-load hours, the lower is the levelised cost of electricity produced. Hence, regions with favourable characteristics for the production of electricity from renewable energies (e.g. wind, solar, geothermal, hydropower) are particularly suitable for the production of powerfuels, as associated generation costs of electricity are relatively low. Higher yearly full-load hours can then be reached by optimally combining PV and wind potentials with battery storage to increase electrolyser load factors. For example, the figure (right) illustrates the differences of the electricity generation costs for various plant types in different countries. Due to the decreasing investment costs associated with renewable energies, electricity generation costs are expected to fall continuously within next decades. Nevertheless, in 2050 electricity costs will still remain the key cost driver of powerfuels. Taxes and levies that augment the electricity price for electrolysers automatically translate into higher costs for the production of powerfuels.


Estimated evolution of electrolyser investment costs Picture: based on (Deutsche Energie Agentur, 2018, pp. 435–437)

Investment costs

Plants for the production of powerfuels are capital-intensive, constituting high fixed and low marginal costs. Thus, the costs associated with the initial investment in synthetic fuel conversion plants are another important cost driver with regard to powerfuels. Investment costs for water electrolysis are expected to further fall within the next decades and continue their historic trend. The degree of the estimated reduction varies between the different studies undertaken, as investment costs are related to plant size and plant technology (see Figure on the right) (Agora Verkehrswende et al., 2018, p. 61).

Investments in electrolysers have been gradually increasing in the recent years and are estimated to reach 40 million USD per year between 2018 and 2020   (IEA, 2018c, p. 220). Electrolyser investment costs have been falling in the past years, indicating a scope for economies of scale. In order to further decrease investment costs in electrolysers technology a significant scale-up of plant size is required.

Investment costs relative to the total production costs of powerfuels decrease with the utilisation rate of conversion plants. In order to be operated economically, powerfuels plants should reach full load hours of at least 3,000 to 4,000 hours per year. Many regions in the EU and other parts of the world can expect an equivalent full-load period of more than 4,000 hours per year (Fasihi, Bogdanov, & Breyer, 2016).

Carbon capture costs

Carbon capture from concentrated sources is more technologically mature. Cost estimates range from 30-70€/tCO2. Direct Air Capture is still technologically evolving and associated with costs of more than 150 €/tCO2, depending on the specific technology used.

Other costs

Some parts of the world have excellent renewable electricity generation potential but lack clean water sources. In these cases seawater could be desalinated  and used for electrolysis, so costs related to that have to be considered (Agora Verkehrswende et al., 2018, p. 84). However, water requirements are limited to e.g. 1.3-1.4 litres per litre of jet fuel (Schmidt et al., 2016, p. 18).

Transportation and storage of raw materials, intermediate products and completed products of powerfuel production should also be taken into consideration especially in cases where the production facility and end consumption are far apart.

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