Chapter 5 Results and discussion
5.1.5 Results of the cost analysis and possible revenues
5.1.5 Results of the cost analysis and possible revenues
The LCOE amounts to 11 €-ct/kWh for the small-manure plant, while the large plant shows specific costs of 9 €-ct/kWh. The BOP has the highest costs with 13.3 €-ct/kWh, but has the advantage to provide pure CO2 for further usage. The plants would still be favourable under the current subsidisation scheme. Under the EEG, large plants above 150 kW have to expect future prices of 9-16.9 €-ct/kWh for inventory plants (Bestandsanlagen) and 14.9 €-ct/kWh for new plants, which underlines the problem of omitted financial support mentioned above (DANIEL-GROMKE et al., 2020). The LCOE can be found in Table 5.22. The specific costs for biogas upgrading are shown as well. The specific costs of 5.7 €-ct/kWhLHV for the large plant are generally favourable, especially for a manure-based plant.
Biogas upgrading is more expensive for the small plant, but with 7.2 €-ct/kWhLHV
prove to be competitive. Revenues from sales of biomethane are not taken into account here, but could be added if there was a possibility to feed it into the grid or sell it as a fuel. Nevertheless, the transport or a connection to the NG grid bears costs and thus must also be considered (DANIEL-GROMKE et al., 2020). As BGPs are often located in remote regions, such a concept would only work if plants are located optimally. For the PtF system, this is not of interest, thus, further analyses lie out of the scope of this work.
Table 5.22: The calculated levelised cost of electricity (LCOE) for the biogas plants investigated and the specific costs when including biogas upgrading.
75 kW 75 kW + BOP 500 kW
LCOE (€/kWhel) 0.107 0.133 0.089
Specific costs for biogas upgrading (€/kWhLHV) 0.072 - 0.057 BOP = Biogas oxyfuel process.
Feasibility of the entire system
Economic feasibility of the entire concept is considered which includes annual manufacturing costs as well as annual revenues. The results are shown in Table 5.23. Here, the costs and revenues of the BGPs are also considered. The methanol production includes the biogas upgrading and H2 production costs. For case 1, the COM for the methanol production are taken from Table 5.12. The COM of case 3 was adapted for excluding the LIR which is already considered in the lower electricity sales of the BGP. The COM for case 4 is taken from Table 5.18. In order to calculate the profits, methanol sales at a competitive price of 0.275 €/kg (METHANEX, 2020) are assumed. Profits are negative for the three cases investigated, amounting to -621,270.81 €/a for the small-manure
plant, -1.12 million €/a for the BOP and -1.60 million €/a for the large plant. It is evident that even without the costs of the BGP, the system is still unprofitable and revenues cannot compensate the costs.
In revenues from co-products, electricity sales are the most relevant, but would have to increase by a factor of 5 to make case 1 profitable. This requires an electricity price of 1.20 €/kWh, which is very unlikely. In the BOP case, the higher methanol sales compensate for the lower income from heat and electricity sales. If the owner of the BGP takes manure from a livestock farm, which has an excess of it, it is possible to receive a remuneration for it. In the calculation of manufacturing costs described above, this is not taken into account, as small-manure plants mostly utilise the manure they produce themselves and rarely require additional amounts.
However, if one assumes a remuneration of 10 €/m³ for the purchase of manure, a revenue of 23,838.14 €/a would be achieved for the standard case. This would result Table 5.23: Annual profits by the entire Power-to-Fuel system presented for the cases 1, 3 and 4.
Case 1 Case 3 Case 4
Manufacturing costs
Biogas plant (€/a) 68,091.02 68,091.02 377,825.30 Methanol production (€/a) 934,515.00 1,485,211.94 3,046,257.29
Total costs (€/a) 1,092,561.90 1,624,281.02 3,515,262.51
COMkg (€/kg)* 4.73 3.32 3.23
Revenues
Electricity sales (€/a) 141,142.50 119,924.08 660,790.00 Heat sales (€/a) 43,316.00 33,542.13 286,563.90 Digestate sales (€/a) 61,092.59 61,092.59 154,695.64 Credit for discharging of
manure (€/a) 23,838.14 23,838.14 247,916.67
Methanol sales (€/a) 58,241.15 128,749.03 291,860.25 Oxygen sales (€/a) 46,416.88 46,416.88 149,903.40
CO2 sales (€/a) 7,287.94 16,104.74 36,512.93
Total revenues (€/a) 381,335.20 429,667.60 1,828,242.78 Profits -621,270.81 -1,124,030.39 -1,595,839.81
* If the system is not considered as an expansion, but including the biogas plant; BOP = Biogas oxyfuel process.
in production costs of 4.30 €/kg of methanol. Hence, the COM would only decrease by a few cents. A price for the digestate of 25.8 €/t is assumed according to
WEICHGREBE (2015), which results in annual revenues of 61,092.59 €/a for case 1. As the BGP owner usually uses the digestate as fertiliser on their own fields, the revenues from digestate could also be seen as a cost saving for not having to purchase mineral fertiliser. The O2 from the production of H2 could also be sold. A price of 150 €/t is assumed according to RIVAROLO et al. (2016). At a quantity of almost 310 t/a of O2, an additional annual revenue of 46,416.88 € could be achieved for the standard case. If a CO2 price of 25 €/t is considered, an additional revenue of 7,287.94 €/a could be achieved from not having to buy the CO2 from the market.
If the price is as high as 250 €/t, revenues of 72,879.35 €/a are reached. Revenues from CO2 sales double for case 3 compared to case 1, which make this case more interesting in terms of that. However, only at a CO2 cost greater than 2,160 €/t in the standard case would the profit be equal to zero. This scenario is not realistic, at least in the foreseeable future.
Further considerations of market introduction
Costs could decrease under certain conditions, e.g., if standardisation and simplifications are introduced. Especially, the investment cost of the methanol plant needs to be reduced as it is one of the main cost drivers for the standard case. The membrane upgrading technology developed by the Apex AG presents an example that has become profitable due to standardisation. Higher production quantities of modules of the methanol plant could, thus, potentially beat down the price of the entire plant. The concept of an 80% learning curve is applied to the FCI in order to see the effect of an increase in numbers of pieces. This approach follows the assumption that each duplication of the production decreases the costs by 20%. The costs that can be reached for case 1, 3 and 4 are shown in Table 5.24. The FCI would, hence, significantly decrease and only be less than a tenth of the costs today.
Table 5.24: Module costs when adjusted by a learning curve of 80%.
Case 1 Case 3 Case 4
Module Number
of pieces Module cost (€) Module cost (€)
Module cost (€)
CP-1 1000 38,381.50 49,142.13 63,417.46
CP-2 1000 45,295.40 58,052.17 74,991.28
CP-3 1000 9,343.11 13,370.57 19,347.47
CP-4 1000 11,211.73 16,031.77 23,206.02
R-1 1000 22,423.47 27,717.48 34,497.28
H-1 1000 1,801.35 1,988.26 2,198.83
H-2 1000 1,681.76 1,681.76 2,049.29
H-3 1000 3,228.98 3,266.35 3,305.43
H-4 1000 1,412.68 1,556.56 1,721.03
H-5 1000 1,498.63 1,659.34 1,812.19
V-1 1000 962.34 1,009.06 1,074.50
V-2 1000 295.24 328.88 379.42
V-3 1000 291.51 308.32 332.18
C 1000 19,975.57 23,044.34 26,707.82
COND 1000 2,541.33 2,832.83 3,169.39
REB 1000 1,532.27 1,730.34 1,955.68
Total 1000 161,876.87 203,720.14 260,165.27
Total today 1 2,114,217.52 2,583,108.13 3,197,559.16
The COM for the system as an expansion (system expansion) and the entire system (base scenario) with and without revenues is shown in Figure 5.5 as opposed to cost reduction opportunities. The costs for the system expansion, as investigated without any revenues, consider an expansion to an already existing BGP. Costs are calculated in sections 5.1.2 and 5.1.3. If the revenues generated by the system are also taken into account for the system expansion (incl. all possible revenues), it results in much lower COMkg of 3.04 € for case 1, 2.60 € for case 3 and 1.38 € for case 4. This is due to the fact that revenues from the system can reduce the utility costs to one fourth which would cause the OPEX to almost cut in half. The costs for the entire system investigated, including the construction of the biogas plants, are also presented (Base scenario). The costs are obviously higher for the entire system, implying that an extension causes lower manufacturing costs. Nevertheless, it only saves a few cents. Here, the revenues make a relevant difference again.
A possibility for reduction in COM would be a decrease in the H2 cost. This is likely to occur in the near future, as CAPEX for electrolysers are expected to decrease to 500 €/kW. Using the new H2 price of 6.57 €/kg, calculated particularly for this farm-site application, would result in COM of 3.96 €/kg methanol for the standard case. The decrease is not high enough, as the storage and WTG still produce high costs. Therefore, another scenario is assumed, where costs for all H2 generation modules, i.e. WTG, electrolyser and storage, are decreased by a factor of three to transfer the cost decrease of the CAPEX to the other modules. Hence, the storage and the WTG also decrease significantly in costs. If this is the case, a H2 price of 3.22 €/kg is reached. For case 4, this would make a great difference, as COMMeOH
would be 1.77 €/kg and get closer to the costs of large-scale plants. This is due to the fact that H2 generation makes the highest contribution to COM in case 4.
Apart from this, a possible adaptation of the plant concept of the small-scale plant, which could lead to a reduction in costs, would be not to carry out all the steps up to the production of pure methanol at the site of the small-manure plant. Instead, the methanol-water separation in the column could be carried out at the site of a large-scale plant, so that one larger column could be used instead of many smaller columns. This would reduce investment costs and lead to a reduction in specific manufacturing costs of almost 10%. Another possibility is to use only one recirculation system, which would eliminate the need for some components, but also reduces the achievable purity. As the column is the most expensive module among the separation vessels, a scenario without the column would reach costs of 4.08 € for case 1 and 2.78 € for case 4 among others. Last but not least, the FCI from the 80% learning curve are used to calculate the COM of the base scenario.
With these, COMMeOH could reach 2.42 €/kg in case 1 and 2.04 €/kg in case 3.
Figure 5.5: Scenario results for costs of manufacturing for the methanol.
Caption: CAPEX = Capital expenditures.
0.00 1.00 2.00 3.00 4.00 5.00 6.00
0 100 200 300 400 500 600 700
Methanol price (€/kg)
Plant capacity (kW)
Base scenario
Base scenario incl. all possible revenues System expansion
System expansion incl. all possible revenues Lower CAPEX of electrolyser –H2 price of 6.57€/kg
Lower CAPEX of electrolyser, storage and wind turbine –H2 price of 3.22€/kg Without Column separation
80% Learning curve for methanol plant Schemme (2020)
The impact of the H2 costs increases in case 4, which is why the decrease in FCI does not cause lower COMMeOH compared to case 3, namely 2.23 €/kg. Hence, the decrease in FCI is especially interesting for the smaller cases, i.e. the standard case and case 3, as the FCI makes up the largest part of the COM. Especially for case 4, a combination of decreased H2 costs as well as learning curves for the methanol plant could be interesting.