Precio Syngas
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NREL is a national laboratory of the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, operated by the Alliance for Sustainable Energy, LLC.
Techno-economic and Market Analysis of Pathways from Syngas to Fuels and Chemicals
TC Biomass 2013 – Chicago, Illinois
Michael Talmadge, Abhijit Dutta & Richard Bain
September 4, 2013
2
Objective
Assess the economics of producing fuels and chemicals from
biomass-derived synthesis gas.
• Process economics based on literature (consistent TEA assumptions)
• Perform more rigorous TEA on promising pathways
o Biochemical conversion of syngas to ethanol and higher alcohols
o Ethanol and higher alcohols to infrastructure-compatible hydrocarbons
• Simple product market analyses
What can we do with syngas?
3
• Simplified TEA model
• Inputs from literature sources o Feedstock rate and properties (heating value) o Product yields o Operating costs (variable & fixed) o Capital costs
• Common scaling assumptions o Capital scaling exponents o Economies of scale for fixed operating costs
• Operating and financing assumptions for nth plant and pioneer plant
• Minimum Product Selling Price literature values average, standard deviation & 90% confidence intervals
Analysis Approach
4
nth Plant Assumptions Parameter Value
Basis year for analysis 2011
Feedstock processing capacity 2,000 Dry Tonnes / SD
Feedstock cost (woody biomass) $75 / Dry Tonne
Debt / equity for plant financing 60% / 40%
Internal rate of return (after-tax) for equity financing 10%
Annual interest rate and term for debt financing 8% / 10 years
Total income tax rate 35%
Plant life 30 years
Plant depreciation schedule 7-year IRS MACRS MACRS = Modified Accelerated Cost Recovery System
Reliability of operations / on-stream factor 0.90
Site development costs 4% of ISBL Installed Capital
Working capital 5% of Fixed Capital Investment
Indirect costs for capital project 60% of Total Direct Costs
Capital equipment capacity scaling exponent 0.70
5
• Internal Rate of Return (IRR): 10% – 25%
• Capital Costs: Pioneer Plant Escalation 210% of nth Plant Estimates (Merrow et al, Rand, 1981)
• Reliability of Operations / On-Stream Factor: Initial value of 0.5 (Merrow et al, Rand, 1981)
Increasing to 0.9 per experience curve (Heinen, SRI Consulting, 2001)
Pioneer Plant Assumptions O
n-St
ream
Fac
tor
Year of Plant Operation
0.0
0.2
0.4
0.6
0.8
1.0
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
~
6
Fuel Pathways Explored
Ethanol & C3+ Alcohols
Hydrocarbons (FT Gasoline, Diesel,
Jet, Lubricants)
Synthetic Natural Gas
Dimethyl Ether (DME)
Syngas
Gasoline (MTG)
Triptyls Olefins (MTO)
Ethanol
Methanol
Syngas Fermentation Butanol
2,3-Butanediol
7
Chemical Pathways Explored
Hydrocarbons (FT Lubes, Waxes)
Acetic Anhydride
Propylene (MTO)
Formaldehyde
Ethylene (MTO)
Hydrogen
Ethyl Acetate
Formic Acid
Methyl Formate
Ethylene Glycol
Acetic Acid
Acetic Acid
Syngas Fermentation
PHA (Polyhydroxyalkanoates)
Syngas
Methyl-Amines
Methanol
Urea
Ammonia
DME Aldehydes (Oxosynthesis)
8
Major Pathway Categories Explored
• Synthetic Natural Gas via Methanation of Syngas
• Ethanol
o Catalytic Mixed Alcohol Synthesis
o Syngas Fermentation *
• Hydrocarbons
o Fischer-Tropsch
o Methanol to Naphtha Hydrocarbons
o Ethanol & Higher Alcohols to Hydrocarbons *
• Hydrogen via Steam Reforming, WGS & Purification
• Methanol via Catalytic Methanol Synthesis
* Pathways explored by NREL through Aspen modeling and rigorous TEA.
9
Synthetic Natural Gas • Methanation of Syngas
10
0
5
10
15
20
25
30
35
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Synthetic Natural Gas 20
11 $
/ M
Scf
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Natural Gas Citygate Price (Dollars per Thousand Cubic Feet). Release Date: 7/31/2013.
Process Sources Min. Selling Price Range ($ / MScf)
Syngas to SNG via methanation
McKeough & Kurkela, 2007 Mozaffarian et al, 2004 van der Drift et al, 2005
nth Plant 16.52 – 19.13
Pioneer 10% IRR 28.50 – 31.05
Pioneer 25% IRR 50.00 – 56.93
Pioneer 10% IRR 29.80 ± 2.10
nth Plant 17.62 ± 2.23
11
05
10152025303540
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
• Techno-economic Analysis
• Market Analysis
Synthetic Natural Gas 20
11 $
/ M
Scf
17.62 ± 2.23
5.50
Average Product per Ton Biomass 11,440 Scf / Ton U.S. Consumption (EIA, 2012) 25.5T Scf / Year
10% of U.S. Natural Gas Market 2.55T Scf / Year Equivalent Biomass Consumption 223 MMTon / Year
Equivalent Biorefineries 310 2,000 Tonne / Day Facilities
29.80 ± 2.10
53.50 ± 5.70
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
12
Ethanol • Catalytic Mixed Alcohol Synthesis
• Syngas Fermentation *
* Pathways explored by NREL through Aspen modeling and rigorous TEA.
13
0
2
4
6
8
10
12
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Ethanol via Mixed Alcohol Synthesis
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Syngas to ethanol via catalytic mixed alcohol synthesis
Dutta et al, 2011 Dutta & Phillips, 2009 Dutta et al, 2010 He & Zhang, 2011 Villanueva Perales et al, 2011
nth Plant 2.87 – 4.83
Pioneer 10% IRR 5.67 – 9.64
Pioneer 25% IRR 11.27 – 19.20
2011
$ /
Gal
lon
GE
Pioneer 10% IRR 8.05 ± 2.08
nth Plant 4.16 ± 1.06
14
0
2
4
6
8
10
12
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Ethanol via Syngas Fermentation
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Ethanol via syngas fermentation
Putsche,1999 van Kasteren & Verbene, 2005 Piccolo & Bezzo, 2007
nth Plant 3.67 – 5.08
Pioneer 10% IRR 6.11 – 8.99
Pioneer 25% IRR 11.07 – 17.02
2011
$ /
Gal
lon
GE
Pioneer 10% IRR 7.14 ± 1.82
nth Plant 4.32 ± 0.83
15
Ethanol via Syngas Fermentation
NREL TEA Model
• Design Report NREL/TP-5100-51400 utilized as basis through clean compressed syngas from biomass.
• Yield structures based on publications from LanzaTech & INEOS Bio.
• Capital costs for fermenters, seed train and cell recovery developed by Harris Group Inc.
Ethanol
C3+ Alcohols
Acetic Acid
Power
Syngas Cleanup
BiomassGasification
Feed Handling & Preparation
Flue Gas
Woody Biomass
Syngas Fermentation
Seed Train
Product Recovery
Heat Integration, Power Generation & Other Utilities
16
nth-Plant MSP Pioneer Plant MSPnth-Plant MSP Pioneer Plant MSP0
2
4
6
8
10
12
Market Price (4-Yr) Price Projection (4-Yr) nth-Plant MSP Pioneer Plant MSP
• Techno-economic Analysis
• Market Analysis
Ethanol 20
11 $
/ G
allo
n G
E
Mixed Alcohols (Literature)
Syngas Fermentation (Literature)
Syngas Fermentation (NREL TEA)
Average Product per Ton Biomass 85 Gallons / Ton U.S. Consumption (EIA, 2013) 13.0B Gallons / Year
50% of U.S. Fuel Ethanol Market 6.5B Gallons / Year Equivalent Biomass Consumption 76 MMTon / Year
Equivalent Biorefineries 100 2,000 Tonne / Day Facilities
2.72
7.14 ± 1.82
3.06 IRR = 10% 25% IRR = 10% 25% IRR = 10% 25%
4.16 ± 1.06
4.32 ± 0.83
15.76 ± 4.11
8.05 ± 2.08
12.59 ± 3.93
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~
17
Hydrocarbons • Fischer-Tropsch
• Methanol to Naphtha Hydrocarbons
• Ethanol & Higher Alcohols to Hydrocarbons *
* Pathways explored by NREL through Aspen modeling and rigorous TEA.
18
0
1
2
3
4
5
6
7
8
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Fischer-Tropsch Hydrocarbons
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Hydrocarbons via Fischer-Tropsch synthesis
Hamelinck et al, 2003 Larson et al, 2009 McKeough & Kurkela, 2007 SRI PEP Yearbook, 2009 Udengaard, 2011 Byrne, 2011 Freeman, 2011
nth Plant 2.52 – 4.19
Pioneer 10% IRR 4.75 – 7.43
Pioneer 25% IRR 9.08 – 13.52
2011
$ /
Gal
lon
GE
Pioneer 10% IRR 5.63 ± 1.53
nth Plant 3.09 ± 0.96
19
0
1
2
3
4
5
6
7
8
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Methanol to Hydrocarbons
Historical Pricing Data Source: U.S. Energy Information Administration. U.S. Total Gasoline Rack Sales Price by Refiners (Dollars per Gallon), EIA Table 5.22 (2011 AEO) and Table 112 (2009 AEO).
Process Sources Min. Selling Price Range ($ / Gal GE)
Hydrocarbons via methanol synthesis and methanol conversion
Phillips et al, 2011 Hindman, 2010 SRI PEP Report 191A, 1999 Udengaard, 2011 Jones & Zhu, 2009 Ahn et al, 2009
nth Plant 2.61 – 3.84
Pioneer 10% IRR 4.67 – 6.47
Pioneer 25% IRR 8.61 – 11.38
2011
$ /
Gal
lon
GE
Pioneer 10% IRR 5.37 ± 1.09
nth Plant 3.24 ± 0.81
20
Ethanol & Higher Alcohols to Hydrocarbons
NREL TEA Model
• Ethanol (and higher alcohol) intermediates for hydrocarbon fuel production.
• Eliminates constraints of renewable ethanol blend limits.
• Technology development taking place in academia, national labs and industry.
Co-Product(s)Syngas
CleanupBiomass
Gasification
Feed Handling & Preparation
Flue Gas
Woody Biomass
Alcohol Synthesis
Heat Integration, Power Generation & Other Utilities
Alcohol to Hydrocarbon Conversion
Hydrogen Plant Naphtha
Mid-Distillates
Mixed C4
Mixed C3
Light Ends
Hydrocarbon Product
Recovery
Natural Gas
Ethanol (and C3+ Alcohol)
Intermediates
Alcohol Separation
21
nth-Plant MSP Pioneer Plant MSPnth-Plant MSP Pioneer Plant MSP0
1
2
3
4
5
6
7
8
Market Price (4-Yr) Price Projection (4-Yr) nth-Plant MSP Pioneer Plant MSP
• Techno-economic Analysis
• Market Analysis
Hydrocarbon Fuels 20
11 $
/ G
allo
n G
E
Average Product per Ton Biomass 65 Gallons / Ton U.S. Consumption (EIA, 2013) 220B Gallons / Year
10% of U.S. Hydrocarbon Fuels Market 22B Gallons / Year Equivalent Biomass Consumption 338 MMTon / Year
Equivalent Biorefineries 440 2,000 Tonne / Day Facilities
2.72
5.37 ± 1.09
3.06 3.09 ± 0.96
3.24 ± 0.81
10.66 ± 2.56
5.63 ± 1.53
9.54 ± 1.87
Fischer-Tropsch (Literature)
MeOH to Hydrocarbons (Literature)
EtOH to Hydrocarbons (NREL TEA)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~~~~~~~~~~~
22
Hydrogen • Steam reforming, water-gas shift & purification
23
0
2
4
6
8
10
12
14
16
18
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Hydrogen
Historical Pricing Data Source: SRI CEH Marketing Research Report, July, 2010 Projected values based on ratios to EIA natural gas projections.
Process Sources Min. Selling Price Range ($ / MScf)
Syngas to H2 via steam reforming, water-gas shift & purification
Spath et al, 2005 McKeough & Kurkela, 2003 Williams et al, 1995 Hamelinck & Faaij, 2001
nth Plant 5.33 – 8.84
Pioneer 10% IRR 10.46 – 15.63
Pioneer 25% IRR 20.93 – 29.07
2011
$ /
MSc
f
Pioneer 10% IRR 12.52 ± 3.62
nth Plant 6.67 ± 2.48
24
02468
1012141618
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
• Techno-economic Analysis
• Market Analysis
Hydrogen 20
11 $
/ M
Scf
6.67 ± 2.48 5.95
Average Product per Ton Biomass 37,300 Scf / Ton U.S. Consumption (EIA, 2013) 4.1T Scf / Year
10% of U.S. Hydrogen Market 0.41T Scf / Year Equivalent Biomass Consumption 11 MMTon / Year
Equivalent Biorefineries 14 2,000 Tonne / Day Facilities
12.52 ± 3.62
24.23 ± 5.72
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
25
Methanol • Catalytic Methanol Synthesis
26
0.0
0.5
1.0
1.5
2.0
2.5
2000 2002 2004 2006 2008 2010 2012 2014
Pricing History
Methanol
Historical Pricing Data Source: IHS CEH Marketing Research Report, 2013.
Contract Spot
Process Sources Min. Selling Price Range ($ / Gal)
Syngas to methanol via catalytic synthesis
Tarud & Phillips, 2011 McKeough & Kurkela, 2007 SRI PEP Yearbook, 2009 Williams et al, 1995 Hamelinck & Faaij, 2001
nth Plant 0.96 – 1.32
Pioneer 10% IRR 1.63 – 2.13
Pioneer 25% IRR 2.97 – 3.91
2011
$ /
Gal
lon Pioneer 10% IRR 1.93 ± 0.39
nth Plant 1.15 ± 0.26
27
• Techno-economic Analysis
• Market Analysis
0.0
0.5
1.0
1.5
2.0
2.5
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
Methanol as Chemical Intermediate 20
11 $
/ M
Scf
1.15 ± 0.26 1.16
Average Product per Ton Biomass 170 Gallons / Ton U.S. Consumption (SRI / IHS, 2010) 1.9B Gallons / Year
10% of U.S. Methanol Market 0.19B Gallons / Year Equivalent Biomass Consumption 1.1 MMTon / Year
Equivalent Biorefineries 1.4 2,000 Tonne / Day Facilities
1.93 ± 0.39
3.41 ± 0.64
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
28
• Techno-economic Analysis
• Market Analysis
Methanol as Fuel Intermediate
Average Product per Ton Biomass 65 Gallons / Ton U.S. Consumption (EIA, 2013) 220B Gallons / Year
10% of U.S. Hydrocarbon Fuels Market 22B Gallons / Year Equivalent Biomass Consumption 338 MMTon / Year
Equivalent Biorefineries 440 2,000 Tonne / Day Facilities
0.0
0.5
1.0
1.5
2.0
2.5
Market Price (5-Yr) nth-Plant MSP Pioneer Plant MSP
2011
$ /
MSc
f
1.15 ± 0.26 1.16
1.93 ± 0.39
3.41 ± 0.64
IRR = 10% 25%
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
29
Conclusions • Hydrocarbon, ethanol and methanol economics can be
competitive for nth-plant.
• Pioneer plant economics are challenged overall.
• Market capacities do not constrain bio-product pathways in
major hydrocarbon fuel markets (natural gas, petroleum fuels).
• With fixed ethanol blend limit, cellulosic pathways and grain-
derived product will compete for limited market.
• Market capacities for methanol-derived chemicals are
constraining.
• Syngas fermentation is potentially competitive, depending on
CO / H2 conversion to product(s).
• Methanol and ethanol are attractive intermediates for
production of infrastructure-compatible hydrocarbons.
30
Future Work
• Develop design reports for selected biomass-to-hydrocarbon
fuel pathways under DOE-BETO directed efforts.
• Apply simplified TEA and market analysis on emerging
pathways to identify economic feasibility in early stages of
development.
• Explore opportunities to improve Pioneer Plant economics
o Biomass co-feeding opportunities (NG-Biomass to Liquids)
o Utilizing inexpensive feedstocks
o High-value co-products
o RIN credits
31
Acknowledgements
• Abhijit Dutta and Richard Bain (co-authors)
• Matt Worley and Ben Fierman of Harris Group Inc, Atlanta, Georgia.
• Bioenergy Technology Office (BETO) of the United States Department of Energy
• NREL Biorefinery Analysis and Thermochemical Platform Teams
32
References
For a complete list of references utilized in this
analysis, please contact Mike Talmadge
([email protected] / 303-275-4632)