Artificial Photosynthesis

C2M Team:

Ismael Ghozael

Luc-Emmanuel Barreau

Timothy Kelly

Wesley Chen

JCAP Scientist:

Joel Ager

JCAP project, support and funding2

“At the California Institute oftechnology, they’re developinga way to turn sunlight andwater into fuel for our cars”President Obama, SOTU –January 25th, 2011January 25th, 2011

JCAP funding: $122 Million over 5 years

Discovery of efficient and

cheap materials

Assembly of pieces into

scalable system

Increased efficiency;

variety of fuel types

2016 2021 2026July, 2010 –JCAP formed

Artificial Photosynthesis Process3

High Voltage PV absorber

ElectrolysisLiquid Fuel Production

H2O

H2

O2

CO2

Liquid fuels(Methanol)

Integrated steps

� Invention (patent pending): Micro-integration of the photovoltaic absorber, the catalyst and water → High efficiency, scalability.

� This technology is very early stage (<1 Year in).

� Many technical unknowns

� Cost target

� Daily production volume

� Purity

Integrated steps

Value proposition4

� Integration: Higher efficiency and scalability

� Distributed & Modular

� Carbon neutral process

� Stable feedstock prices

Project approach5

Products considered Rationale

Hydrogen is produced by JCAP’s prototype

Oxygen is produced by JCAP’s prototypeO2

Methanol is the simplest crediblefuel candidate to synthesize

Methanol

Goal: To determine target cost of products and market characteristics for artificial photosynthesis to be competitive in these existing markets

Hydrogen Markets6

Consumption

RangeIndustry

Very small 200-220 kg/day

Small

Total H 2 US Market 2010: • $22bn• 9bn Metric tons

Small 1000 kg/day

Medium 6.0 metric tons/day

Large 20 metric tons/day

97% of consumption

Hydrogen production overview7

US production capacity, Million metric Tons

� Steam Methane Reforming (SMR): 95%

Centralized

US production:

Gen

erat

ion

size

10.7

Source: "The impact of increased use of Hydrogen" , DoE

� Centralized

� Distributed

� Electrolysis: 4%

� Mostly distributed

Gen

erat

ion

size

Average US - grid

Hawaii- gridSolar PVWind

Production costs: heavy sensitivity on feedstock

8

$/kg

of H

ydro

gen

Wind

Source: "The impact of increased use of Hydrogen", DoE.

Source: www.eia.doe.gov, team analysis$/kg

of H

ydro

gen

Type Cylinders Tube trailer Cryogenic truck Pipeline

3% small 7% small 90% small

Hydrogen distribution costs9

Quantity

% Market3% small merchant

7% small merchant

90% small merchant

Large merchant

Cost n.a. 2.6 $/kg 1.7 $/kg 0.98 $/kg

Sensitivity n.a. 40c/100km 8c/100km 15c/100km

Infra-structure

1200 mi, 95% in Texas and

Louisiana

Source: Hydrogen and fuel cells: The US market report (picture), hydrogen.pnl.gov, DOE hydrogen project

Total costs of Hydrogen10

Target Cost: <$6.70

Source: "Hydrogen supply: cost estimates“, NREL, “Hydrogen and fuel cells: the US market report”

$/kg

Hydrogen – Target market selection11

� First target: Distributed H2

� Premium value (competing tech costs of 6.7$/kg)

� Modularity valuable to customers

� Limited / no switching costs

� Operational limitations of the technology

� Low pressure output

� Intermittent production (solar) => Need for storage

Additional Possible Product: O212

� Electrolysis: 9kg H2O -> 8kg O2 + 1 kg H2.

� O2: 0.21$/kg (liquid), Premium H2: 6 $/kg

� H2 value = 6$, O2 value=1.6$. O2 is a by-product.

Market Hurdles ? Decision

Premium O - Medical - PurityPremium O2 - Medical gas

- Purity- Regulatory: only electrolysis currentlyapproved- Use of H2 unclear: hospitals unwilling to operate small fuel cells

O2+H2 – Petroleum refining

- Competing with captive production

O2+H2 – Rocket fuel (NASA)

- Usage is liquid H2 and O2. Liquefactionwould be cost-prohibitive

Go, go under conditions, no-go

Why Methanol?

- Short technology path- Low manufacturing switching cost.- Regulatory environment is favorable- Credible fuel alternative

Source 1 : energy.gov Source 2: ethanolrfa.org/pages/statistics#B

Methanol markets14

Mature markets– Traditional use• Formaldehyde• Acedic Acid• Dimethyl Terephtalate• Methyl Chloride

Growth markets– Energy use• Fuel blending• DME• Biodiesel

Worldwide market for methanol15

Market size:• US imports : $1.6bn•World market : $20bn

Annual Growth:

Source 1 : Methanex report 2009. Source 2: DeWiitt & Co 2011

Annual Growth:• 1996-2009 CAGR 4.2%• 2010-2015 CAGR 7.3%

Drivers:• Fuel category• Chinese policy

Methanol production cost16

60% of production cost

15% of cost

Source : http://www.methanex.com/investor/documents/InvestorPresentation-April2011_000.pdf

25% of cost

NE + 19%

Methanol storage and distribution17

1225T

Imports:64%

MW + 34%

SE + 14%

Barge movementTruck/railroad movement

$0.42/KG24T

Source 1 JJ&A Global Methanol Report Source 2- picture : Dewitt Study

H2 target cost for competitive price18

SeparationSeparation15%

Transport (*)47%

Other53%

Pump Price CO

Carbon capture

H2generation

TransportDistribution42%

Syngas60%

Synthesis25%

15%15%

Cost breakdown Methanol retail price

Price

$0.67/kg

Distributed H2

+ captured CO2

$0.37/Kg(55% of cost)

Source 1: Price MarkUp Methanol institute (Methanol flexible Fuel vehicle)Source 2: Pump price – Methanol – Market /retailer priceSource 3: Carbone capture - http://sequestration.mit.edu/pdf/David_and_Herzog.pdf*(*) Truck transport to MidWest location

CO2$0.10/Kg

H2$0.27Or

$2.16/Kg

Artificial PhotosynthesisAlternative

Production58% Distributed

Generation

Methanol: Longer-term opportunity

� TRUE: The market is indeed in equilibrium BUT growth is strong, driven by the fuel market. This technology has the potential to accelerate this trend.

� The methanol industry is extremely efficient. To compete, the cost target for

19

“Today the demand for methanol is happy with its supply”, DOW Chemicals

H2 with artificial photosynthesis has to decrease to 2 $/Kg.

� Potential accelerating factors

� Decrease in the cost of Carbon capture.

� Carbon Tax

� Increased technology integration encompassing to the fuel generation.

Artificial photosynthesis roadmap20

Tech

nolo

gy

Dev

elop

men

t

Sensitivity: electricity costs

Sensitivity: natural gas price

Tech

nolo

gy

Dev

elop

men

t Sensitivity: natural gas price

Sensitivity: CO2 price

Source: BCC research, team estimates

21

Appendices

Appendix – Hydrogen pipeline infrastructure

22

Appendix – Hydrogen – Tube trailers and liquid bulk markets

23

Appendix – Hydrogen total costs

24

Appendix – Hydrogen distribution costs

25

Appendix – US grid electricity prices by location26

Source: http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

Appendix - Hydrogen Legal Landscape

27

� Federal investments in Hydrogen-related technology is ongoing: See Energy Policy Act of 2005

� Safety Guidelines for use of Hydrogen are governed by the DOE's Hydrogen Safety Review Panel

Appendix - Why Methanol is a credible fuel!

� The Open Fuel Standard

� First introduced in the U.S. Congress in 2009, the Open Fuel Standard Act would ensure the widespread adoption of alcohol-fuel compatible FFVs. These bills – with slight variation in current House and Senate forms – would require that at least 50% of the vehicles produced for the U.S. market that use an internal combustion engine (which would include plug-in hybrid vehicles) must be compatible with blends up to both M-85 and E-85 fuel by the year 2012. The same rule would apply each

28

up to both M-85 and E-85 fuel by the year 2012. The same rule would apply each year until 2015, at which time 80% of vehicles produced for the U.S. must be fuel-

choice enabling vehicles.

� The cost for these conversions would be about $50 - $150 per car, and at current prices, a driver would save more than that annually in fuel costs if they filled up with M-85 all year long.

� The unsubsidized cost of methanol – on an energy party basis – currently averages about 90% of the cost of regular unleaded fuel.

Fuel energy density29

Appendix - Methanol : Production cost –Methanol Plant

30

Appendix - Methanol market is fragmented

31

Appendix - Methanol Spot price

32

Appendix - Methanol Use by derivative

33

Appendix - Methanol (ageing) production facility

34

Appendix - Methanol SMR – Costs models

35

Mainstream process:

Gas reforming using natural gas feedstock.

Low Cost Methanol process

$77 per tonnes out of the gate.

$0.025

$0.102

Producing Methanol :costs

Fixed Cost

$0.105

$0.102 Fixed Cost

(industry norm)

financing cost

Variable cost of

production Assumptions:

-25 year useful life plant

- Gas cost low US$1 MMBTU

- Finance 70:30 debt/equity at 8% on 10 years

Appendix - Methanol – Storage Cost

Storage costs are negotiable and vary depending on the product, tank size,

special equipment required, mode of in and out bound shipments, contract terms,

etc. In a broad sense, a public terminal company would charge a base rate per

ton, per month for methanol stored in a 12,600 metric ton (100,000 barrel) tank

on a year’s contract. This base charge would include four tank capacity

throughputs (50,400 mt/400,000 bbls) per year, and some extra incidental costs

36

such as loading tank trucks and cars. Depending on customer/contract status,

these terms are negotiable, particularly if more frequent throughputs are

required. Four tank capacity throughputs per years (about a turn per quarter) are

fairly standard. Storage costs per ton can be reduced significantly by increasing

the number of throughputs per year.

Source 1 : Dewitth & Co